Thursday, 20 May 2010

EUR/USD Erases Loss

The EUR rallied higher against the U.S dollar in afternoon trading on Thursday, reversing a deep decline. The shared currency rose to $1.2574 in recent action, from $1.2429 in late trading Wednesday.

The European currency had rebounded sharply after earlier hitting a fresh 4-year low of $1.2143 as a lack of confidence in European leaders' ability to contain the region's debt crisis drove investors to the greenback as a refuge from risk. The EUR advanced on speculation the Swiss National Bank sought to support the Franc, prompting traders to theorize that the European Central Bank may do the same for the shared currency. Traders said that the EUR may rally to the highest level of the week and advance to as high as $1.2675.