Risk appetite is making an appearance, thanks in large part to the news that Lawrence Summers has withdrawn his name for consideration as the head of the Federal Reserve when Ben Bernanke’s term is up. The news has provided a boost for the euro, even though there are questions about the sustainability of the eurozone’s fledgling recovery.
Lawrence Summers made it clear earlier that he does not wish to replace Ben Bernanke as the Chair of the Federal Reserve Board when Bernanke’s un-renewed term is up. Instead, Janet Yellen, the current Vice Chair, is likely to get the job. The news has provided an earlier boost to the euro, since Yellen is likely to preside over a slower implementation of the bond buying taper.
The news prompted a bit of risk appetite in world markets, and the euro is benefitting, although it has slipped a bit against the US dollar since its earlier gains. Even though there have been recent questions about the sustainability of the eurozone economic recovery, the 17-nation currency is heading higher against its major counterparts today. There are still questions about what’s next for the euro, and the possibility of an ECB rate cut, but for now Forex traders favor the euro.
At 16:19 GMT EUR/USD has actually slipped a little bit, to 1.3347 from the open at 1.3356. EUR/GBP is up to 0.8382 from the open at .8381. EUR/JPY is up to 132.1905 from the open at 131.8195.
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