EUR/USD Goosed Higher On General Optimism
Euro got a quick 60-pip boost today following the release of CPI data from the United States. Additionally, there are talks that the ESM fund might allow for 700 billion euros instead of 500 billion euros. The move would help calm markets, and that is also providing support for the euro today.
In the United States, the CPI reading for February came it at 0.4 percent. That was slightly lower than the expected 0.5 percent, but it still shows a trend of economic growth, and that has Forex traders looking for higher yields, and seeing improved expectations for the global economy.
Additionally, things appear to be looking up in the eurozone. The European Stability Mechanism and the European Financial Stability Facility are the subject of discussion right now. Instead of keeping the bailout capacity at 500 billion euros, they are talking about raising it to 700 billion euros. The idea is to increase the ability to keep the eurozone countries stable and to contain sovereign debt contagion.
As a result, the euro is heading higher than it has been for a while. Other high beta currencies are also benefitting from the news. The combination of better economic news in the United States, and the expectation that eurozone leaders will shore up the region, is helping the 17-nation currency.
At 16:06 GMT EUR/USD is higher at 1.3181, up from the open at 1.3080. EUR/GBP is a little lower at 0.8316, down from the open at 0.8324.
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Earlier News About the Euro:
- Euro Mostly Flat on Disappointing Data (2012-03-15)
- Euro Struggles as Forex Traders Wonder Who's After Greece (2012-03-13)
- Euro Higher on Greece, But Could Sink on Spain (2012-03-12)
- ECB News Helps Euro in Forex Trading (2012-03-08)
- Euro Stabilizes as Traders Move Into Wait and See Mode (2012-03-07)