Euro is higher today, reaching levels not seen since early in the year. Euro actually broke through the 1.3700 level against the US dollar to reach a session high of 1.3705. Since then the euro has eased back a bit, but it is still showing strength as the US dollar shows weakness.
Much of the euro’s strength in recent weeks has come as a result of a growing economy and hopes that the eurozone debt crisis really is over. The last few days, though, all of the focus has been on the United States and the declining situation with the US dollar.
Thanks to the budget battle and the debt ceiling issues, many are worried that the United States will not be able to maintain its economic status. Indeed, a lot of trust in the dollar was lost because of the brinkmanship practiced by political factions.
As a result, the euro is surging. There are concerns about the euro’s strength, though. It’s possible that a strong euro now will hinder economic growth — especially if the euro is oversold. Slower growth could mean a weaker euro later if the ECB has to step in later to boost the economy.
At 20:24 GMT EUR/USD is up to 1.3685 from the open at 1.3676. EUR/GBP is up to 0.8465 from the open at 0.8460. EUR/JPY is down to 133.8600 from the open at 133.9350.
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