Euro Posts Weekly Gain After Two Weeks of Losses

This week was “a mixed blessing” for the euro. For the most part, the currency showed a good performance as worries about the debt crisis subsided, but by the end of the week concerns returned.

The summit of the European Union leaders caused optimism among Forex traders, who anticipated some cohesive plan for dealing with the sovereign-debt crisis. The summit ended, a plan was presented, but traders didn’t look very happy about the outcome. Surely, some market participants were pleased by the plan of the EU leaders, but most investors aren’t sure that suggested measures would help to deal with the problems in the longer run, not to mentions concerns about expected Greek default.

The shared 17-nation European currency also get boost from the US, where politicians aren’t able to reach agreement about measures to battle the US debt crisis, making the dollar less appealing than the euro. But the decline of the euro against some currencies on Friday made traders feel uncertain about the euro. Was that drop just a minor correction or a first step in a long way down? It’s hard to tell as currently the euro, along with the dollar, is one of the worst currencies to trade because of its unpredictability.

EUR/USD jumped from 1.4109 to 1.4356 and EUR/JPY advanced from 111.58 to 112.75 over this week. EUR/CHF, unlike the previous two currency pairs, hasn’t declined on Friday, rose from 1.415 to 1.768 during this week and posted a weekly high of 1.1891.

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