Euro Pares Gains as European Union Revises Outlook

Euro is mostly higher today, but the 18-nation currency is paring some of its gains. The latest growth outlook from the European Union has been revised lower, and that is weighing a bit on the euro, and causing it to give up some of its earlier gains.

Earlier, the euro saw some solid gains against its major counterparts as the US dollar pulled back and as the outlook for the world in general improved a bit. However, concerns about the eurozone are back in the spotlight, and the euro is paring some of its earlier gains as a result.

The European Union released a revised outlook for the eurozone, indicated that the GDP for the 18-nation currency region would see growth of 0.8 per cent for 2014, and 1.1 per cent in 2015. This is lower than expectations for 1.2 per cent growth this year and 1.7 per cent growth for next year.

These revised expectations are weighing on the euro, since they underscore the continued difficulties facing the eurozone, and there is an indication that, perhaps, the ECB will have to take even more drastic measures to prop up the eurozone economy.

At 11:53 GMT EUR/USD is up to 1.2515 from the open at 1.2492. EUR/GBP is barely higher, to 0.7821 from the open at 0.7820. EUR/JPY is up to 141.9060 from the open at 1.4188.

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