Euro is getting a bit of a boost today, heading higher as optimism about Spain becomes the focus today. Also helping matters for the euro against the US dollar is the continued strength of gold, thanks to its use as an inflation hedge.
Spain is expected to reveal a fiscal reform plan next week. The hope is that a reform plan indicates that the embattled country is ready to ask the European Central Bank for a bailout. Concerns about what’s next for Spain are high, especially considering some of the issues Greece has experienced. Relief that Spain might be falling in line is providing a solid boost for the euro right now.
Also supporting the euro is the strength of gold. Gold prices (and other commodities like oil) and the euro generally move together, since gold usually moves inversely to the US dollar. With unlimited quantitative easing now on the table to reduce the value of the greenback, the euro — along with gold prices — is likely to continue to show a degree of strength, even with worries about how the eurozone will cope with all its challenges.
At 14:14 GMT EUR/USD is up to 1.2991 from the open at 1.2968. EUR/GBP is down, though, heading to 0.7982 from the open at 0.7997. EUR/JPY is higher, up to 101.5985 from the open at 101.4650.
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