Euro is gaining ground today, due in large part to the dovish sentiment coming out of the US Federal Reserve. Concerns that the Fed would announce interest rate increases sooner rather than later, along with worries about the eurozone economy, had been weighing on the 18-nation currency.
Today, the euro is gaining ground against its major counterparts, and is back above the 1.3600 level against the US dollar. After worries about sluggish eurozone economic growth, and speculation that US data would force the Federal Reserve to change its timetable for an interest rate hike, the euro had been floundering.
Things changed, though, after the Fed gave no sign that interest rates are going any higher anytime soon. As a result, things in the eurozone immediately began looking better. It is also helping that bond yields on 10-year Spanish and Italian bond yields are falling. Indeed, they yields on both countries’ bonds fell seven basis bonds.
There are still some concerns about policy divergence between the United States and the eurozone, and that could lead to more weakness for the euro in the future, but for now the 18-nation currency is enjoying the upper hand.
At 14:12 GMT EUR/USD is up to 1.3631 from the open at 1.3596. EUR/GBP is up to 0.80001 from the open at 0.8000. EUR/JPY is up to 138.8020 from the open at 138.5670.
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