Thursday, 31 Mar 2011

Euro Soars on Expectations ECB Will Hike Rates

The euro advanced against most of it major currency pairs on Thursday, boosted by expectations of euro zone rate hikes following Thursday's strong inflation numbers, but gains could stall in the next few weeks due to nagging peripheral debt concerns. The EUR is currently trading higher against the JPY by nearly 100 pips at 117.85. It is also trading higher against USD and GBP.

The fundamental outlook for the euro zone remains cloudy, particularly at the periphery, even though an interest rate increase seemed imminent at a European Central Bank monetary policy meeting next week.

Tomorrow, forex traders cannot afford to overlook a batch of data that is expected from the leading economies. Both the British Manufacturing PMI and U.S Non-Farm Employment Change will be released at 8:30 GMT and 12:30 GMT respectively, promising an extremely volatile trading day. Traders should take advantage of this unique opportunity and use the volatile market in order to capitalize profits.