Wednesday, 3 Feb 2010

Greek Plan to Combat Deficits Boosts Euro

In a move likely to boost the Euro against its major currency pairs, The European Commission voiced approval today for the Greek plan to combat its ever expanding deficit. The decision, while widely expected, is likely to help the ailing Euro after several weeks of persistent declines. Already the decision is bearing results, with the EUR/USD moving above the 1.4000 level, and the EUR/JPY pair spiking to its current level of 126.72.

Buoyed by the European decision, investors returned to riskier assets, boosting the Aussie against the U.S. Dollar in afternoon trading. Currently the pair is trading 0.8894, up over 20 pips from this morning. The Dollar has ample opportunity to recoup its losses as two leading publications are set to be released today. Both the ADP Non-Farm Employment Change Report and the ISM Non-Manufacturing PMI are likely to create heavy volatility for Dollar pairs in trading later today. If the results come in as forecasted, traders can expect the greenback to make some substantial gains.