Euro Gains Strength After Earlier Selloff

Yesterday, the euro was in the midst of a selloff after the news came out that the ECB is considering policy options to boost stimulus (and weaken the 18-nation currency). Today, though, things have leveled out the euro has gained strength on disappointing US data, BOE comments, and the fact that Asian central banks are buying up euro denominated assets.

Today, the euro is recovering a bit from its difficulty related to yesterday’s selloff. News that the Bundesbank was ready to bank further easing in the eurozone sent the 18-nation currency plunging against its counterparts. Today the story is different. US economic data has been lackluster, and that is going against the idea that the Fed will resume its tapering soon.
Additionally, Bank of England officials squashed rumors of an imminent rate hike, and that has the pound dropping against its counterparts, including the euro. On top of that Asian central banks, in efforts to weaken their own currencies in the name of stimulus, have been buying euro denominated assets, boosting demand for the currency. All of this is combining to help the euro today.
At 13:08 GMT EUR/USD is up to 1.3710 from the open at 1.3703. EUR/GBP is up to 0.8175 from the open at 0.8145. EUR/JPY is down to 139.70440 from the open at 140.1250.

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