ECB Bond Buying & US Payrolls Lead to Fourth Weekly Gain of Euro
The euro jumped this week, posting the fourth consecutive weekly gain. The major driving factors for the rally were the policy meeting of the European Central Bank and US nonfarm payrolls that came out worse than expected.
Speculations about the ECB policy meeting and whether the central bank would announce a bond-buying plan were driving the euro for the whole week. The central bank indeed described its asset-purchase program that should help the indebted European nations by lowering borrowing costs. The resulting optimistic outlook for the eurozone bolstered the shared European currency, but the positive effect was mitigated by the fact that the announcement was expected.
Arguably, US payrolls had more noticeable effect as the bad data was not expected. Yet employment growth in the United States was significantly below forecasts, spurring speculations that the Federal Reserve will also introduce some sort of an asset-purchase program next week. Such speculations were positive for the euro and the currency soared by the weekend.
EUR/USD jumped from 1.2569 to 1.2804, the highest weekly close since May. EUR/JPY surged from 98.45 to 100.20, posting the highest closing price since July. EUR/GBP climbed from 0.7913 to 0.7996, which was also the highest since July.
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Earlier News About the Euro:
- Euro Surges as Bond Buying Program Receives Approval (2012-09-07)
- ECB Maintains Rates and Initiates Bond Buying, Euro Jumps (2012-09-06)
- Euro Climbs Ahead of ECB Policy Meeting (2012-09-06)
- Euro Loses Gains on Profit-Taking (2012-09-04)
- Euro Gains Slightly, But Remains Vulnerable (2012-09-03)