Thursday March 25, 2010 - 19:12:39 GMT
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Forex Hound - www.forexhound.com
Up and Down Euro waiting for Solid Summit News
The Euro has been
trading in a sideways, choppy manner as investors await news from the
two-day European Union summit. Earlier in the trading session, the Euro
received a boost from comments by Germany‚Äôs Merkel and a decision by
the European Central Bank‚Äôs Trichet.
The Euro rebounded after
German Chancellor Angela Merkel presented her aid package plan for
cash-strapped and debt laden Greece. Short covering turned the Euro
around after Merkel said she supports loans from the International
Monetary Fund and other European nations as a last resort if all other
means of support fail and the country faces default.
Central Bank President Trichet also contributed to the turnaround in
the Euro by extending the bank‚Äôs emergency lending rules. Earlier in
the year, Trichet said the central bank would not ease its collateral
policy for the sake of a single country. This action gave weaker shorts
and excuse to pare their positions.
Although these actions are
helping to support the Euro, there is still no indication that a solid
bottom is in place and that the trend is getting ready to turn higher.
The EUR USD is likely to continue to trade under volatile conditions
over the next two days as news from the European Union summit meeting
is likely to leak throughout the day.
The U.S. Dollar has been on
pressure most of the day against all majors. Renewed interest in
higher-yielding assets is contributing to the weakness. The strong U.S.
stock market has been most supportive to the Australian, New Zealand
and Canadian Dollars.
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