Monday, 16 May 2011

EUR/USD Climbs to 1.4240 as European Finance Ministers Meet

The euro gained from its lowest level in almost seven weeks against the U.S. dollar after a meeting of European finance ministers regarding the region's sovereign-debt crisis took place today.

The 17-nation currency strengthened today amid speculation that the euro-zone will offer a rescue package to the sluggish Portugal economy. In addition, the ministers' effort to put pressure on Greece to take more action in order to justify an improved aid package did not halt the euro's rally.

The euro gained nearly 200 pips vs. the dollar, and the EUR/USD pair reached as high as the 1.4243 level. The shared currency also saw a 100 pip gain against the British pound, and the EUR/GBP pair reached a daily high of 0.8770.

As for tomorrow, traders are advised to follow the German ZEW Economic Sentiment release, which is scheduled at 09:00 GMT. A positive result, above the expected 4.8 reading, has potential to push the euro further upwards.