Euro is breaking higher today, moving through the 1.29 level against the US dollar. Good news regarding debt auctions in Europe, plus good labor market news in the United States, has Forex traders looking for higher yields.
Risk appetite is making an appearance as optimism returns to the markets. In Europe, French borrowing costs dropped, and Spain sold more bonds than expected. On top of that, jobless claims in the United States dropped by 50,000, and Bank of America released an improved outlook. Additionally, there are rumors that China will be letting banks lend more.
All of this points to expectations that things will improve in global markets, and that things in Europe might still turn around. With risk appetite improving, and with signs of optimism amongst Forex traders and others, it is no surprise that the euro is gaining against the US dollar and other major counterparts.
Right now, there is no need for safe haven, and Forex traders are looking for higher yields — while the news is good. There are still more hurdles for the eurozone, and it remains to be seen what will happen next, but, for today, the euro is rallying.
At 16:46 GMT EUR/USD is higher at 1.2913, up from the open at 1.2862. EUR/GBP is up to 0.8346 from the open at 0.8332. EUR/JPY is higher at 99.6470, up from the open at 98.8150.
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