Euro Looks Healthy, Likely to Continue Growth

EUR/USD

The euro is said to benefit from a “currency war,” in which many countries step in to keep their currencies weak, and thus to protect exports.

“The euro is one of few major currencies where there are no deliberate measures to try to weaken the currency, either directly through intervention or indirectly through QE (quantitative easing),” said Micheal Derks, currency strategist at FXPro.

Steve Barrow, head of G10 currency research at Standard Bank, predicts the euro will rise to $1.45 in three months, even if the Federal Reserve insists on a small dose of quantitative easing.

Overall, the euro looks healthy, growing against the dollar from the beginning of the week, and currently trading at $1.4034.

EUR/GBP

The euro rose 1% versus sterling yesterday, as a result of demand from a European sovereign account and sterling being under pressure due to weak UK construction activity data.

The euro rose to 0.8734 pounds so far, compensating for the losses on Monday when it fell to a four-week low of 0.8651.

According to traders, the European sovereign account was a large buyer of euro/sterling at the moment.

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