Euro Ends Higher vs. Most Majors After Hard Week of Trading
This week was not an easy week to trade. The market sentiment was shifting and changing all the time, making it hard for traders to catch a particular price movement. The euro reflected that volatility as it fell during the week, reaching all-time lows against some currencies, but ended the week higher against most majors.
The week started with moderate optimism, carried over from the previous week, when European Central Bank President Mario Draghi promised to support the euro. Traders were hoping for some action from the ECB, but uncertainty was slowly eroding the good mood. The Federal Reserve damaged the sentiment further on Wednesday as it refrained from expanding quantitative easing, though such decision was expected. Major damage to markets was caused by Draghi next day, when the monetary policy decision was announced and it became clear that the ECB did not take any action except for repeating its old promises. Markets virtually collapsed after the announcement and the euro, unsurprisingly, was among the losers.
Rescue for the euro came on Friday as US non-farm payrolls came out much stronger than was expected (and expectations were not small), lifting traders’ mood and spurring risky assets upward. There were also rumors that the ECB would start its bond buying program very soon.
The euro followed changes of the sentiment closely. It was moving in swings at the start of the week, slowly going down as optimism was leaking away. The currency sank after the central banks’ policy decision, reaching record lows against the Australian and Canadian dollars. The Friday’s good news kicked the shared 17-nation currency to the upside, turning weekly loss to weekly gain in one day.
EUR/USD was up from 1.2301 to 1.2386 this week, following the drop to the weekly low of 1.2133. EUR/JPY rose a little from 96.56 to 97.15. EUR/CAD advanced from 1.2354 to 1.2400, while its weekly minimum of 1.2193 was the record low. EUR/AUD also touched an all-time low (1.1601) and actually did not post a weekly gain, closing at 1.1715, somewhat below the opening price of 1.1738.
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Earlier News About the Euro:
- Euro Gains as Traders Expect Some Intervention from the ECB (2012-08-03)
- Euro Drops on Draghi Disappointment (2012-08-02)
- Euro Waits for Central Bank News (2012-08-01)
- Euro Retains Upper Hand, But Sees Limitations (2012-07-31)
- Euro Posts First Week of Gains in Four Weeks (2012-07-28)