The euro rose against the dollar and the pound as concerns involving the swine flu have eased and the reported economic confidence in the region hit the highest level in a one-year period.
The swine flu caused panic in the beginning of the week on speculations that it could deepen the global recession severely, making multiple stock markets to post sharp falls and high-yielding currencies to be sold excessively. The current pandemic status of the swine flu is already not so frightening, bringing a certain amount of confidence among traders that bet on the euro after the highest economic confidence was posted on a report today. The contracting inflation and effective government measures to ease the recession improved the consumer spending during the past month, which, even if influenced by Easter, is showing sustainable signs of recovery.
Economists affirm that a growing risk appetite can be perceived on the markets, favoring the euro, as the yen, considered the safest refuge currency by most of the traders, had a day of significant losses against all major currencies. The improved economic confidence came in the exact time as risk aversion shrinks and investors search for high-yielding assets backed by some fundamental factors, which is, for the time being, the case for the Eurozone currency.
The EUR/USD rose strongly from 1.3005 to 1.3256 and the same movement happened in the EUR/GBP pair rising from 0.8885 to 0.8967.
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