Euro on 2-Month Dollar High While Stocks Linger

The euro wandered back from two-month highs in opposition to dollar on Monday as traders reported recent profits amid the evidence that the eurozone economy has commenced the year at a moderate pace towards recovery.

Stocks changed narrowly in front of a new batch of earnings, particularly out of the United States despite the expectations that China will shortly tighten monetary policy to put a stop on rising inflationary pressures.

However, the most significant developments in the market are centered on the euro currency that recently reached $1.3646, which is its highest rate since November 22. The increase proved to be a sign for investors to reserve some recent gains. Two weeks ago, the euro was trading at $1.2875, which is its four-month low.

The euro’s increase is a result mainly of the declining concern over Europe’s debt crisis despite the signals from policymakers that a widespread agreement is currently discussed which will help raise their firefighting powers, as well as financial muscle.

According to David Bulk, markets analyst at BGC Partners, bonds have responded positively as the EU continues to try to adopt a more united front towards sovereign debt issues. The data released on Monday further proves that the entire eurozone economy continues to grow at a reasonably steady pace.

But, while the headline figures represent that the eurozone economy is in a fairly good condition, they cover wide differences between countries. Germany, which is Europe’s biggest economy, continues to power ahead while other countries such as Ireland, Greece and Portugal lag behind as their governments continue painful sternness programs to put their public finances in good shape.

Categorized | Finance

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