The Euro gained versus the US dollar in the previous European trading exchanges on developments in the Euro Zone and weaker job figures in the US, increasing speculations of another QE by the Federal Reserve. In today’s European exchanges, the bullish sentiment is likely to continue, giving way for the single currency to rise versus the Greenback.
Optimism in the Euro Zone is high on speculations that the European leaders would make meaningful developments in the battle against the debt crisis at their meeting this week, increasing demand for the common currency. Yesterday, Eurogroup Head Jean-Claude Juncker met with Greek Prime Minister Antonis Samaras and showed support for the efforts of the government to bring the economy on the path of recovery. German Chancellor Angela Merkel and French President Francois Hollande likewise joined in giving support to Greece, as they endeavored to work together on their approach to the Hellenic Republic. Merkel is set to meet Samaras today for further discussions on related matters.
Meanwhile, the single currency is expected to incline on weak US jobs report. Unemployment claims rose by 4,000 to a seasonally adjusted 372,000 for the week ending August 18, figures from the Labor Department showed. This is seen to add weight to the argument of further monetary easing by the Fed. The minutes of the Fed’s latest meeting showed that many officials pushed for more additional aid if the economy does not improve. With the Fed appearing to lean towards helping the US economy, and positive developments in the Euro area, the EUR/USD pair is anticipated to rise. As such, a long position is recommended in today’s European exchanges.
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