Euro is rallying today, following on the heels of a choppy couple of weeks. Last week the euro didn’t perform quite as well as expected, considering the data released about the eurozone, but at the start of this week the 19-nation currency seems to be making up for it.
As gold gains ground in the markets, the euro is getting some support. Euro often moves with gold prices, and with gold surging today, the 19-nation currency is finding some support.
Another reason the euro is getting some support is due to the fact that it is so cheap right now that it can be used as a financing currency. Investors can borrow euros inexpensively and use them to fund the purchase of other currencies with higher yields.
Last week, the euro didn’t do as well as expected after the data released showing somewhat promising inflation and GDP numbers. This week, even with uncertainty, the euro appears ready to rally. However, some analysts think that any gains by the euro will be short lived as the currency’s strength fades.
At 16:22 GMT EUR/USD is up to 1.0907 from the open at 1.0833. EUR/GBP is also higher, gaining to 0.7603 from the open at 0.7599. EUR/JPY is up to 131.7540 from the open at 172.8250.
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