This week was very good for the euro even though the beginning of the week did not suggest such an end. The European Central Bank boosted the shared 17-nation currency as it said about a recovery later this year.
At the beginning of the week the market was digesting the news of the previous week, especially the hint that the Federal Reserve may end its quantitative easing program. The euro struggled amid uncertainty about the future Fed policy as well as ahead of the ECB policy announcement. Most traders believed that the central bank would keep the monetary policy unchanged, but there were enough market participants that believed in an interest rate cut to make the common European currency a bit soft.
The ECB not only left interest rates stable, but also promised that the European economy will come on track to recovery. The economy is expected to continue experiencing weakness at the beginning of this year, but should slowly turn to better later. Such comments made the euro jump against all other most-traded currencies, leading to huge weekly gains.
EUR/USD jumped from 1.3079 to 1.3335 — the weekly close last seen in May. EUR/JPY surged from 115.20 to 118.95 — the highest close since April 2011. EUR/GBP climbed from 0.8134 to 0.8270, reaching the strongest closing price since May.
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