The euro pared its losses and extended the rally against the U.S. dollar and the Japanese yen as the global stock markets showed the good performance, spurring the appetite for the risk.
The Standard & Poorâs 500 Index rose 2.4 percent to the highest level in almost a month. The gains on the stock markets encouraged the investors to end bet on the currency’s decline and improved their risk sentiment. The European stock markets also experienced the large inflow of the fresh money, which was supportive to the shared 16-nation currency.
The economists warn, though, that the markets are giving conflicting signals, hinting that the euro’s decline isn’t over. For now, the euro managed to overcome the recent unfavorable news, but any significant reason to doubt in the European currency’s strength may push the euro down to the bottom again.
EUR/USD traded at about 1.2322 as of 22:08 GMT today after opening at 1.2218. EUR/JPY traded near 112.74, up from the opening level of 111.90.
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