Risk appetite is on the rise today, following good news from the United States. While risk appetite helps the euro in general, the 17-nation currency is also being helped along by optimism about what’s next for the ECB. Many Forex traders just don’t believe that the ECB will let the euro fail.
Yesterday’s announcement by ECB President Mario Draghi, which left out a plan to buy more bonds from cash-strapped countries, sent the euro tumbling. However, many Forex traders are rethinking yesterday’s panic. Many don’t believe that the ECB will really let the euro fail, and there are expectations that, as things continue to get worse, the ECB will be forced to intervene.
Also helping the euro right now is the general risk appetite in the markets. US nonfarm payrolls just came in at 163,000 for the month of July, beating analyst estimates. This news is reviving hope for the US economy, and that means that riskier assets — like the euro — are in demand.
Euro is also gaining against the pound, thanks to more disappointing data out of the United Kingdom. This time, it’s the services PMI reading that is weighing on the pound.
At 16:51 GMT EUR/USD is up to 1.2382 from the open at 1.2181. EUR/GBP is up to 0.7916 from the open at 0.7851. EUR/JPY is up to 97.3395 from the open at 95.3025.
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