Euro is struggling today. Part of the struggle is due to the fact that traders are holding their collective breath, waiting for the Federal Reserve announcement that many expect to result in a modest beginning to the tapering of the current monthly asset purchase program. Also contributing to the euro’s struggles, though, is uncertainty over the upcoming German election.
Even a modest reduction in the Federal Reserve‘s asset purchase program could help boost the dollar against the euro moving forward, especially since the eurozone continues to struggle with unemployment and other economic difficulties — in spite of leaving the recession behind and seeing some improvements to the economy.
Also creating a bit of uncertainty for the euro is the upcoming German election. Basically, the election is a referendum on the euro’s stability. Chancellor Angela Merkel is running for a third term, and asking the German people to support her in continuing policies that she insists lead to better euro stability. If Merkel fails to win, there is concern that an anti-euro party could come to power, and that would be difficult for the eurozone to handle, since Germany is the largest economy in the 17-nation region.
At 14:48 GMT EUR/USD is down to 1.3355 from the open at 1.3359. EUR/GBP is down to 0.8365 from the open at 0.8400. EUR/JPY is down to 132.2250 from the open at 132.4215.
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