Even with a level of uncertainty, the euro is gaining ground today. The 17-nation currency is up against its major counterparts, even as a number of issues remain unresolved.
It’s been an interesting couple of days for the eurozone. There is a measure of uncertainty about what’s going to happen next, but that hasn’t stopped the euro from heading higher against other major currencies today. Risk appetite is helping, especially with the improved economic data coming out of the United States.
The news continues to be better for the world’s largest economy, with US inflation hotter than it has been in three years, and US industrial output up 0.7 per cent in February.
The good news is helping risk appetite to some degree, and helping the euro get over some of the more recent hurdles. The Italian parliament is still deadlocked, and no ruling government has been formed. As a result, Italian bond yields have inched higher, and there are concerns about Italy’s ability to meet its obligations.
Also of concern is divergence in the eurozone. ECB head Mario Draghi talked about the problem the eurozone has with high labor costs and low productivity. This doesn’t bode well for the eurozone economy going forward.
At 13:17 GMT EUR/USD is up to 1.3083 from the open at 1.3004. EUR/GBP is up to 0.8635 from the open at 0.8620. EUR/JPY is up to 125.4400 from the open at 124.9860.
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