Euro Pulls Back After Yesterday’s Bounce

Euro is heading lower today, pulling back after yesterday’s bounce. Once again, Forex traders are looking to the future, and wondering if — perhaps — Mario Draghi’s optimism yesterday was a bit overdone.

Yesterday, with the ECB holding off on further stimulus measures, and with ECB President Mario Draghi painting an upbeat picture of the economic forecast for the eurozone, the euro bounced higher against the US dollar. Today, though, the euro is pulling back a bit as things settle down a little bit.
Even though Draghi was optimistic, and some of the better news from the eurozone has provided some grounds for optimism in recent weeks, the reality is that the credit situation is still tight, and debtor countries on the periphery are still struggling. This could mean more euro weakness in the future.
Indeed, if the ECB decides that a stronger euro is no longer a priority, and that stimulating the still-flagging eurozone economy is more important, then there could be some further euro weakness coming.
At 13:58 GMT EUR/USD is down to 1.3203 from the open at 1.3245, but still up from the session low at 1.3191. EUR/GBP is higher, moving up to 0.8520 from the open at 0.8491. EUR/JPY is down to 128.2950 from the open at 128.4450.

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