Better news out of the eurozone is fueling a rally for the euro today. A surprise increase in confidence is helping the 19-nation currency gain against its counterparts as Forex traders speculate on whether or not the ECB will really need to add stimulus.
Just last week, Mario Draghi and other ECB policymakers were talking about the possibility of more economic stimulus for the eurozone. Today, though, there is speculation that maybe drastic measures won’t be necessary.
The latest measure of confidence for the eurozone has been released, showing an increase to 105.9 from the previous reading of 105.6. What makes this even more surprising is the fact that a decline to 105.1 had been forecast. With this surprise reading, there is now speculation that maybe extra stimulus may not be necessary.
The news is also prompting a rally by the 19-nation currency, with the euro higher almost across the board. There is also speculation that EUR/USD could recover to the 1.20 level in 2016, although there are still issues related to the viability of the eurozone’s recovery.
At 13:57 GMT EUR/USD is higher, moving up to 1.0958 from the open at 1.0923. EUR/GBP is also higher, gaining to 0.7168 from the open at 0.7157. EUR/JPY is up to 132.6070 from the open at 132.2680.
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