Euro Ready to Lock In Weekly Gain

Euro is heading higher today, ready to lock in a weekly gain. After a bit of a choppy beginning to the week, euro is ready to go out with gains, ending two weeks of losses against the US dollar.

For the most part, euro gains today are all about the optimism felt by forex traders and investors on markets around the world. A number of somewhat surprising — and positive — developments are contributing to a new sense of hope for the global economy, as well as regional economies.

In the eurozone this week, the ECB kept rates the same, but forex traders are more focused on the efforts at bank recapitalization, and the apparent progress being made on the eurozone sovereign debt situation. As a result, it’s not surprising that things are improving for the euro.

Also helping matters is the fact that US
non-farm payrolls came in better than expected. The labor market in the US still looks weak, but it’s not as weak as many thought it would be. This is being taken as a positive sign, and boosting confidence around the world. And, as risk appetite improves, forex traders look for higher yielding, higher beta currencies. As a result, the US dollar is falling in favor of the euro.

At 14:04 GMT, EUR/USD is higher at 1.3499, up from 1.3438 at the open. EUR/JPY is also higher, up to 103.59, up from 103.87. EUR/GBP is losing ground, though, down to 0.8652 from 0.8699. The confidence boost received by sterling, as well as the global equity rally, is helping the UK pound against the euro.

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