Once again, optimism is creeping back into the markets, and Forex traders are feeling a little better about what might be coming. Euro is heading higher as risk appetite returns on better news and improved expectations.
In the eurozone, even though there is a recession happening, there are hopes for recovery. The recent Greek debt deal is providing hope that other heavily indebted countries in the region will have a way out. The news has lowered Italian bond yields, providing hope that eurozone countries will maintain their ability to stay afloat.
Also helping the euro right now is the news that a deal might be reached in the US fiscal cliff drama. Once again, there is optimism that negotiations will work, and that the situation will be resolved without sending the United States into another major recession.
The euro is higher on these expectations, but there are still plenty of barriers to the success of the 17-nation currency region. Recession is still a factor, and the sovereign debt crisis is far from solved for the long term. For now, though, there is just enough optimism to give the euro a boost.
At 13:53 GMT EUR/USD is up to 1.2988 from the open at 1.2953. EUR/GBP is up to 0.8098 from the open at 0.8088. EUR/JPY is up to 106.5605 from the open at 106.3150.
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