Euro is gaining today, mainly thanks to dollar weakness. With disappointing economic news out of Germany, there’s not much to hold the euro up right now, so the fact that the US dollar is struggling is helping the 17-nation currency.
The latest economic data out of the eurozone shows that the ZEW is down, and that inflation throughout the eurozone indicates subdued price pressures. With signs that the economy continues to falter in the eurozone, there’s not much there to support the euro. However, the greenback is weaker today, thanks to Forex traders cutting their long positions and waiting for Federal Reserve Chair Ben Bernanke to make his testimony to Congress later this week.
US dollar is suffering a bit after the latest US retail sales data provided disappointments. The news indicates that maybe the economy isn’t doing so well, and that speculation that the Fed would end its easing programs sooner rather than later was a bit premature.
In any case, volume is likely to remain thin for dollar pairs, since there is a great deal of interest in Bernanke’s testimony. In the eurozone, there are still hurdles to overcome — especially politically — as solutions to the recent problems remain out of reach.
At 14:05 GMT EUR/USD is up to 1.3109 from the open at 1.3062. EUR/GBP is up to 0.8691 from the open at 0.8651. GBP/USD is down to 1.5081 from the open at 1.5100.
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