Euro Falls Before G-7 Meeting

The euro, which has been one of the strongest currencies among major pairs this year, fell today before speculations suggested that a Group of 7 finance ministers meeting this week will approach the current euro strong valuation, raising concerns and damping demand for the Eurozone currency.

A drop in the euro price versus most of the 16 main traded currencies could be perceived today in markets before G-7 central bankers meeting in Sweden today is likely to discuss the current euro rates and eventually provide statements indicating that a strong European currency, at certain levels, may cause problems for the economic recovery in the region, causing traders to evade euro-priced positions opting for the U.S. dollar and higher-yielding options in the South Pacific region. The yen was one of the few currencies which was unable to gain versus the euro, as reports in South Korea shifted attractiveness out of Japan in the Asiatic region.

The Eurozone has much of its income based on exports, and a strong rally for the euro, as it could have been perceived during the previous weeks mainly versus the greenback and the pound may affect the region’s economic recovery, hence central bankers and policy makers concerns regarding the euro valuation, which are already forcing the currency down today in foreign-exchange markets.

EUR/USD traded at 1.4558 as of 10:21 GMT from a previous rate of 1.4640 yesterday. EUR/GBP traded at 0.9100 before being traded at 0.9175 hours earlier.

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