Germany’s highest court ruled today that it will not block the eurozone’s bailout fund. With this tacit approval of the 700 billion European Stability Mechanism, the ECB is ready to move forward with crisis-fighting action as it deems necessary.
The news of ruling gave the euro a boost, especially against the US dollar. Forex traders are waiting now for the news from the Federal Reserve meeting. Ben Bernanke is expected to say something about more stimulus for the US economy, and further easing could mean a lower dollar.
For now, though, most of the focus is on the euro, and the hopes that many have for the eurozone now that the situation is a little more certain. The delay for the ESM is over, and the funds can begin being used to shore up countries that are struggling — and at the same time help keep the euro solvent.
Between the ESM and the latest bond buying program from the ECB, there is a lot of hope for the euro, and that is being expressed in the gains that the euro is making today.
At 14:20 GMT EUR/USD is up to 1.2899 from the open at 1.2855. EUR/GBP is up to 0.8014 from the open at 0.8000. EUR/JPY is up to 100.5005 from the open at 99.9620.
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