Earlier euro pulled back on uncertainty about the Federal Reserve minutes, as well as concerns about Spanish debt. As Spanish bond yields rose, the euro dropped. However, things are turning around a little bit. After pulling back, the euro is now gaining against the US dollar.
Right now, European banks are delaying the necessity of dealing with potential problems, and so far these tactics are working. The euro is gaining as a result. And, as equities in the United States pare earlier losses, and struggle toward gains, some high beta currencies like the euro are receiving a bit of a boost.
While the euro hasn’t reached its high for the session, it is higher than it was at open, and definitely higher than the session low at 1.3299. Risk appetite has been making a comeback in the last little bit, even with the troubles in the eurozone.
However, it’s important to be careful, since things aren’t so cut and dry right now. This session has been choppy, with the euro going from gains to losses to gains again. More data should help smooth things out — for now. But volatility is likely to remain for a while.
At 14:56 GMT EUR/USD is up to 1.3339 from the open at 1.3322. EUR/GBP is higher at 0.8354, up from the open at 0.8313. EUR/JPY has also recovered, moving higher to 109.7500, up from the open at 109.3225.
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