Forex traders took a step back from a recent euro selloff, helping the 18-nation currency find support above the 1.29 level. While there is greater mid-term to long-term demand for the greenback, right now the euro is looking for a bit of relief.
Following remarks from ECB officials and others that are supportive of further easing for the euro, the 18-nation currency sold off. Today, the euro is taking a breather, holding above 14-month lows against the US dollar, finding support above the 1.2900 level. Euro is also finding support against the Japanese yen.
The current breather for the euro is unlikely to last, however. With the United States expected to see interest rate increases in the relatively near future (at least, sooner than originally expected), and economic improvements in many other regions, the euro is likely to remain one of the weaker players in Forex trading.
In fact, there are some who think that the euro could become a funding currency for the carry trade, much like the Japanese yen. With rates so low, and other countries expected to begin increasing rates, the euro could easily find a new role.
At 10:47 GMT EUR/USD is up to 1.2952 from the open at 1.2937. EUR/GBP is down to 0.8027 from the open at 0.8033. EUR/JPY is up to 138.0495 from the open at 137.3955.
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