Euro is heading a little bit higher against the US dollar, and gaining against other major currencies today. However, the gains aren’t as big as they could be, with concerns about what’s next for the ECB’s plans for interest rates.
Euro is getting some help from the fact that fewer banks need to rely on the European Central Bank for funding help. Many of the banks in core countries like Germany need less and less help from the ECB, and that is helping support the idea that the worst of the eurozone crisis is over.
However, it’s not all good news. Peripheral countries in the eurozone still need funds from the ECB. Additionally, there are concerns that the interest rate offered by the ECB — 0.75 per cent — is still higher than market rates. There is a divergence between what is being charged by the ECB, and the actual market.
Many Forex traders are choosing to focus on early repayments of loans to the ECB, as well as Mario Draghi‘s insistence that the financial situation in the eurozone is improving.
At 16:00 GMT EUR/USD is a little bit higher at 1.3350, up from the open at 1.3348. EUR/GBP is up to 0.8624 from the open at 0.8609. EUR/JPY is up to 125.4650 from the open at 125.0550.
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