Euro is seeing slight gains today, heading a little higher against the US dollar. For now, the gains are somewhat limited, since trading is thin. With US markets closed for the Labor Day holiday, it is little surprise that most currencies are rangebound right now. Euro, though, is looking to eke out some gains today.
Much of the euro’s strength today is coming from expectations that the European Central Bank will be able to stave off the debt crisis. Forex traders and others are waiting for more detailed plans from the ECB, and many think that the ECB President, Mario Draghi, will offer answers to many of the questions being asked. Also helping the euro right now are gold’s gains, which are pushing the US dollar lower.
However, the same thing that is giving the euro some strength — hope for ECB action — also makes the euro vulnerable. What happens if the ECB doesn’t deliver? There has been a lot of disappointment in recent months regarding eurozone leaders and their ability to come to some sort of agreement on what should be done. The process has been very slow, and there are still some rumors that it might be better to just allow some countries to exit the eurozone.
At 14:41 GMT EUR/USD is up to 1.2573 from the open at 1.2572. EUR/GBP is steady, at the same level as the open, at 0.7916. EUR/JPY is slightly lower at 124.3200, down from the open at 124.3950.
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