Euro Jumps as EU Leaders Make Plan to Help Greece

The euro surged today on the speculation that the leaders of the European Union will increase the size of the rescue fund and will accept a temporary Greece’s default, reducing threat of spreading of the debt crisis to other countries of the region.

The European politicians strive to make a period of default for Greece as short as possible. The European Financial Stability Facility will support the nation. To do so, economists hope, the EFSF will increase its size and will back up Greek bonds. It should make easier for the European Central Bank to accept default.

The hopes for the plan devised at the EU summit boosted the euro, but many analysts believe that optimism will be short-lived. At the very best, the crisis in Greece will be eased, but the problems in the Eurozone are too great to be easily solved in one step.

EUR/USD jumped from 1.4214 to 1.4377 as of 18:15 GMT after falling earlier to 1.4138. EUR/JPY climbed from 111.97 to 112.89, while EUR/CHF advanced from 1.1649 to 1.1755.

If you have any questions, comments or opinions regarding the Euro,
feel free to post them using the commentary form below.