The euro jumped yesterday and retained its gains today as hopes for asset purchase plan of the European Central Bank continued to support the shared 17-nation currency and made market participants more willing to invest in European assets.
Two ECB officials described the bond buying plan yesterday. The plan will focus on government bonds instead of broader range of assets. German Chancellor Angela Merkel said she can accept the program if it is temporary. The ECB will announce its policy decision today.
The German debt auction was another bullish factor for the euro. Demand for German 10-year bonds was not high and market analysts interpreted that as a sign that investors have less need for safety.
EUR/USD was at about 1.2596 as of 1:17 GMT today, following yesterday’s jump from 1.2532 to 1.2599. EUR/JPY traded at 98.82 after the rally from 98.35 to 98.80. EUR/GBP rose from 0.7899 to 0.7922 on the previous trading session and was near yesterday’s close at today’s session.
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