Risk Appetite Appears, Helping Euro in Forex Trading

Risk appetite is making an appearance today, helping the euro in Forex trading as investors look for better yields. Unexpectedly good news has many Forex traders considering that things might start turning around — and this is helping the euro right now.

One of the biggest supports for the euro is that German parliament voted to support the euro bailout fund. With a little more support for the EFSF, there is hope that the sovereign debt crisis could be contained. This news has spurred the euro higher against the US dollar in forex trading, although there are still some doubts about whether or not the sovereign debt crisis can be resolved.

Another bit of positive news is that US economic data surprised to the upside. Jobless claims dropped dramatically, falling to their lowest level in six months. While the US economy still has a long way to go (the Federal Reserve recently downgraded the outlook), there are signs that things might be turning around for the US economy — albeit slowly.

These two pieces of news have combined, however, to create a situation where risk appetite is making an appearance. At 13:42 GMT, EUR/USD is at 1.3611, up from the open at 1.3543. EUR/JPY is at 104.80, up from the open at 103.75. Euro isn’t faring so well against the UK pound, though; EUR/GBP is down to 0.8685, down from the open at 0.8695.

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