The euro was very strong today against the majority of most-traded currencies with the exception of the extremely strong Japanese yen. The budget deal between Italy and the European Union, the dovish policy statement of the Federal Reserve, and positive macroeconomic data in the eurozone — all those factors contributed to the rally of the shared 19-nation currency.
The major contributing factor for the rally was the policy announcement from the Fed. While Fed’s stance did not seem as dovish as many market participants had expected, it was dovish enough to send the US dollar down. Consequently, the euro, which often trades inversely to the greenback, rallied.
Another important bullish event was the budget agreement between Italy and the EU. Italy agreed to reduce its budget deficit target to 2.04% from the initial figure of 2.4%.
Released by the European Central Bank today, the eurozone current account surplus widened to â¬23 billion in October from â¬18 billion in September. Analysts had expected it to stay almost unchanged.
EUR/USD surged from 1.1376 to 1.1469 as of 19:51 GMT today. EUR/GBP advanced from 0.9017 to 0.9049. Meanwhile, EUR/JPY declined from 127.95 to 127.50.
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