The euro advanced today against the U.S. dollar, erasing the yesterday’s decline, and rose versus the Great Britain pound and the Japanese yen after China confirmed its intentions to invest in Europe, damping the risk aversion sentiment and aiding the currencies tied to growth.
Chinaâs State Administration of Foreign Exchange said on its website today: “Europe has been, and will be, one of the major markets for investing Chinaâs exchange reserves”. This announcement eased the concerns that the bigger investors will turn away from the European currency. Not everybody thought that the depreciation was a bad thing, though, as it can help the European economy, making the exports from European and the vacations in Europe cheaper.
The analysts say that the euro is becoming the funding currency. The currency tested the support level twice and traders are now expecting where the resistance level lays. It can be pretty high as EU’s currency is considerer heavily oversold.
EUR/USD traded near 1.2381 today as of 18:55 GMT after it opened at 1.2172. EUR/GBP traded at 0.8485 after opening at 0.8460. EUR/JPY rose to 112.53.
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