Euro is heading higher today, gaining dramatically as Forex traders expect Germany’s high court to back the European Stability Mechanism, which is also referred to as the eurozone’s bailout fund.
The German court is expected to hand down a ruling on whether or not the ESM is compatible with the German constitution, and there is speculation that the answer will be favorable to the bailout fund. As a result, many are expecting further support for the euro.
Also giving the euro a boost, especially against the US dollar, is the fact that the conclusion of the two-day Federal Reserve meeting is supposed to result in an announcement of more easing for the greenback. Even though there have been improvements to the US economy, things aren’t moving as fast as many would like. More easing for the US dollar would weaken the currency against the US dollar, and the euro is surging on that expectation.
For now, it looks like hope is alive for the eurozone. Measures taken in recent weeks have helped to shore up the 17-nation currency, and it seems as though more measures to boost the euro and save embattled eurozone countries will be approved.
At 13:02 GMT EUR/USD is up to 1.2825 from the open at 1.2759. EUR/GBP is up to 0.7995 from the open at 0.7975. EUR/JPY is down to 99.8065 from the open at 99.8820.
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