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Euro Gains on US News, but Focus Shifts to Austerity

October 17, 2013 at 7:58 by Miranda Marquit

Euro banknotes rolled upEuro is surging on the news that lawmakers in the United States have come to an agreement to end the shutdown and avert a default. Risk appetite has returned to the markets as Forex traders greet the news with enthusiasm. However, with the some of the attention off politics in the United States, some focus is returning to eurozone austerity.

As the eleventh hour approached, US politicians finally passed a deal to avert default, and to end the partial shutdown. The news has been greeted with relief, since there were concerns that a default could result in a slowing of the economic progress made recently.

Risk appetite is back, and the euro is seeing the benefits.

However, the new focus regarding the eurozone is austerity. The European Commission is going to begin reviewing budgets of member states before they are submitted to their own parliaments. The purpose is to continue with the austerity seen following the sovereign debt crisis. Eurozone growth is expected to get a boost in the coming year, and between that and measures by periphery countries to improve their budgets, there are hopes for euro strength.

At 7:55 GMT EUR/USD is up to 1.3620 from the open at 1.3534. EUR/GBP is up to 0.8487 from the open at 0.8486. EUR/JPY is down to 133.4600 from the open at 133.6675.

If you have any questions, comments or opinions regarding the Euro, feel free to post them using the commentary form below.

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