Questions about how long the euro can remain on top in Forex trading are being raised today as the 18-nation currency continues to hold its own against some of its major counterparts. While the euro is down against the yen, it is higher against the dollar and the pound.
Even with the disappointing data recently released in the eurozone, the euro is heading higher against some of its major counterparts today. Sterling is weak on dovish comments, and the dollar continues to struggle as the Fed refuses to commit to an interest rate timetable.
Some economists and analysts are concerned that the eurozone will find itself in a situation of long-term deflation, like that experienced by Japan. Japan is still going through its “lost decade” — a decade that has stretched out to nearly 15 years. However, other analysts point out that the eurozone is in recovery, even though it is a slow recovery. Plus, they say, deflationary pressure hasn’t been at the same level.
Even though many analysts think the eurozone will avoid a Japanese-style economic problem, future euro weakness is assumed because the ECB will likely have to adopt even looser monetary policy.
At 13:21 GMT EUR/USD is up to 1.3635 from the open at 1.3606. EUR/GBP is up to 0.8023 from the open at 0.8010. EUR/JPY is down to 138.7150 from the open at 138.7455.
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