Euro Goes Up as GDP Surpasses Forecasts in US

The euro increased against all of its major rivals today, as the US GDP report signaled that the market participants dug themselves to deep into the pessimism of the risk-aversion and that it’s still a good idea to buy currencies near their medium-term bottoms.

The euro was trading better than the British pound and the Japanese yen in the Forex market even before today’s GDP release, but added the US dollar to its intraday trophy room after the Q2 second estimate was out in the States. The gross domestic product gained 1.6 percent according to this latest report, which, despite being below the previous estimate level, was better than the traders have expected.

Although the gain in EUR/USD remains minimal, while the volatility level is high due to the news proximity, the analysts suggest that this report will have a medium-term effect on how the euro is trading. It may actually help to switch the investors’ vision from “fear” to “greed”, increasing the attractiveness of all risk-associated assets (and the currencies too, of course).

EUR/USD is now trading near 1.2720 as of 12:55 GMT after closing at 1.2716 yesterday. EUR/JPY rose from 107.40 to 108.05, while GDP/JPY went up from 131.10 to 131.56.

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