Euro Higher against Dollar on Eurozone Optimism

Euro is higher against the US dollar today, getting a boost from another round of optimism about a solution to the sovereign debt crisis. So far, euro has hit a high just for today at 1.3901, before dropping back a bit.

Once again, optimism is high that this weekend summit will produce an agreement for a way to contain the sovereign debt crisis in the eurozone. Perhaps Forex traders feel that the EU leaders will have to do something at some point. And, with Greece moving ever closer to the precipice, and with the recent Moody’s downgrade of Spain, it seems as though delay is likely to come to an end.
However, it is important to remember that choppy financial markets could easily swing from gains to losses. Forex markets have been quite volatile of late, with the global economy and the eurozone driving hopes and fears. If nothing is resolved on with the upcoming meeting, euro is likely to see a huge dip next week.
For now, though, euro is gaining against the dollar, although it is not doing as well against the pound or the yen.
At 15:00 GMT EUR/USD is higher at 1.3892, up from the open at 1.3781. EUR/GBP is down, heading lower to 0.8711 versus the open at 0.8726. EUR/JPY is also lower, down to 105.56 from 105.84.

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