Euro Holds Onto Gains Even with Uncertainty in Spain

The euro is holding on to some of its recent gains today, even with uncertainty over what’s happening in Spain. However, the euro’s gains might be short-lived, as the fate of economic reforms in Spain are in doubt, and as the US dollar is expected to gain ground in the coming year.

Over the weekend, Spain held elections, and no party won a clear mandate to govern. This situation means uncertainty for what’s next for the Spanish economy. Economic reforms are being questioned, and without a clear governing party, it’s hard to say what steps will be taken to shore up Spain’s situation.

Even with these questions, and with other issues related to the eurozone, the 19-nation currency continues to hold on to some of its recent gains. Euro is getting some help from risk appetite as global stocks rise and as gold prices surge higher.

However, many analysts expect the euro’s current gains to begin to evaporate in 2016. With the Federal Reserve set to keep raising interest rates following an initial increase last week, and uncertainty in the eurozone, the euro is expected to start dropping soon.

At 16:46 GMT EUR/USD is up to 1.0924 from the open at 1.0866. EUR/GBP is up to 0.7336 from the open at 0.7285. EUR/JPY is up to 132.3050 from the open at 131.6550.

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