Wednesday, February 1, 2012

FOREXYARD: Forex News Blog

FOREXYARD: Forex News Blog

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EUR Stages Recovery Following EU News

Posted: 31 Jan 2012 08:08 AM PST

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News that euro-zone leaders came to an agreement to set up a permanent bailout fund lifted the euro throughout today’s trading session. While Greece still has yet to come to an agreement with its creditors regarding a debt-swap deal, investors responded to the EU news by shifting their funds away from safe-havens to riskier assets. The EUR/USD briefly crosses the 1.3200 line as a result, while the EUR/JPY shot up over 50 pips before staging a downward correction.

Analysts are still maintaining that any gains the euro makes in the coming days are likely to be temporary. Even if Greece finally announces a debt-swap deal, as it is widely expected to do by the end of the week, optimism in the euro-zone economic recovery is likely to be short lived. Signs that Portugal is close to defaulting on its debt are one several indications that the euro-zone crises is far from over.

Tomorrow, traders will want to pay attention to the US ADP Non-Farm Employment Change figure, as it is likely to determine the direction the euro takes in afternoon trading. Last week, negative US news led to major gains for the common currency. Should today's news come in below forecasts, the euro may be able to extend its bullish trend.
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