Friday, 21 Jan 2011

EUR Rises on All Fronts

The euro rose to a two-month high against the dollar on Friday, helped by Asian sovereign demand and improving confidence in the euro zone, but its rally appeared on shaky ground as it neared key technical resistance.

The EUR/USD cross is actually currently trading higher by 80 pips today at 1.3580 However, against the JPY, the EUR is trading higher by 50 pips at 112.30, as we see a sharp correction in the pair's behavior. The EUR/GBP pair is level today at 0.8490, as market volatility seems to have slowed down as late night trading approaches.

Expectations of a strengthened euro zone rescue fund and a strong German Ifo report were lending support to the euro, together with a more hawkish outlook from the European Central Bank recently, but debt problems were still in the background.