The euro has surged this morning against the dollar, yen, pound and its other main currency counterparts. The euro has been very bullish in recent trading days. The latest gains for the European single currency come following the decision by the Federal Reserve that it will go ahead with a new bond-buying program to boost the U.S. economy.
The EUR/USD pair is higher today by 0.1% at $1.3087. The EUR/GBP is up 0.18% at 81.11 pence. The USD/JPY has advanced 0.26% to 83.48 yen.
There are a number of other factors which are also playing into to the bullish euro today. The reality is that the EUR has been undervalued in previous trading weeks and received a lot of support lately. Therefore, the latest gains which we are seeing at the moment are very understandable.
This morning there was an Asian stock market rally which increased the demand for riskier currencies such as the euro, Aussie and kiwi.
There are diverse factors driving the financial markets today. Investors do understand this, and feel that the euro is where the returns are to be made. This is despite a touch of pessimism being apparent due to the deadlock with regards to the U.S. budget.
The greenback is in lower demand today due to the fear that lawmakers in the U.S. will take longer than previously thought in agreeing to an effective budget, which will help the U.S. roll curb its debts. On the plus side, at least there is a certain degree of risk sentiment this Thursday.