Euro Regains Strength, Policy Makers Unlikely to Intervene
The euro jumped today following yesterday’s slump as unexpectedly favorable macroeconomic data increased attractiveness of the currency, while hopes that policy makers will not prevent appreciation added to the euro’s strength.
Fears of the political turmoil in Europe abated, reducing pressure on the shared currency of the eurozone. At the same time, several positive report were released, including the eurozone composite Purchasing Managers’ Index that rose from 48.3 to 48.6 in January even though analysts have predicted in to stay unchanged. Some data was not as favorable, like eurozone retail sales that fell 0.8 percent in December from November, more than was predicted.
French President Francois Hollande said that a strong currency may deepen the region’s recession. Such comments weakened the euro initially, but the currency quickly regained strength as experts speculated that the European Central Bank will not act to stop the currency’s rally.
EUR/USD climbed from 1.3513 to 1.3581 as of 18:57 GMT today after falling to 1.3457. EUR/JPY rebounded to 126.75 following the drop from 124.82 to 123.99. EUR/GBP jumped from 0.8572 to 0.8675.
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Earlier News About the Euro:
- Political Concerns Halt Euro Rally (2013-02-04)
- Euro Continues to Gain as Better Data Comes In (2013-02-01)
- Euro Mixed Against Other Majors (2013-01-31)
- EUR Highest Since 2010 vs. JPY as Economic Confidence Improves (2013-01-30)
- EUR/USD Reaches Highest Rate Since 2011 (2013-01-29)