A positive Chinese GDP report, combined with a better than expected German ZEW Economic Sentiment figure led to some investor risk taking throughout today’s trading. The euro received a significant boost against its safe-haven currency rivals as a result of the news. Against the US dollar, the euro rose as high as 1.2807 before retreating during the evening session. Still, the EUR/USD remains well above the 17-month low reached last week at 1.2624. The EUR/JPY, which recently hit an 11-year low, shot up well over 100 pips before hitting resistance during the afternoon session.
Analysts continue to warn that any gains the euro makes for the foreseeable future are likely to be short lived. The problems surrounding the euro-zone debt crisis are too big to ignore and are likely to grow unless significant action takes place in the near future. At the moment, investors remain concerned that Greece will have to default on its debt, while it is widely expected that the EU will cut interest rates in the near future. While positive global data is likely to boost riskier currencies like the euro in the short-term, they may not be able to help them stage a long-term recovery.
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Dan Eduard is a Market Strategist with ForexYard. His addition to the ForexYard team has brought a unique new perspective to our clients. Dan's ability to compare and contrast trans-national issues with events in the market is uncanny and many clients so far have used his advice to make leaps and bounds in their trading strategies. He has been published on the ForexYard Trading Blog and affiliate websites. He carries a BA in Political Science and an MA in History.
