The euro posted the unexpectedly strong gains today despite speculations about possible default of Greece and spreading of the
The reason for such surprising performance was anticipation of another interest rates hike by the European Central Bank. ECB governing council member Nout Wellink said that the recent increase of the interest rates was an “extremely important” signal for investors that shows higher inflation shouldn’t be counted on.
John McCarthy, director of currency trading at ING Groep NV, said:
The prospect of an ECB rate hike is in the forefront of peopleâs minds. For the time being, the euro is receiving a boost from the prospect of higher rates.
The idea of raising borrowing costs in the European Union when some of the member nations are on the brink of default looks brave, to say the least, but traders think that such move is possible and that’s driving markets today.
EUR/USD advanced from 1.4233 to 1.4337 today as of 19:46 GMT. EUR/JPY rose from 117.65 to 118.25, following the slump to the intraday low of 117.08, and EUR/CHF went from 1.2755 up to 1.2898.
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