By: Barbara Zigah

The Euro is holding onto gains made yesterday following the extraordinary move by the worlds’ major central banks to enhance U.S. Dollar liquidity. The coordinated efforts by the Federal Reserve, Bank of England, ECB et al will take place beginning next month and continue through the year’s end. The goal is to meet the needs of Eurozone banks who are unable to obtain dollar funding in the private markets. That news gave a broad lift to the common currency, with momentum still strong.

How long the momentum will last is questionable, given the circumstances in the Eurozone. Later today, the European Union’s Finance Ministers will meet to discuss solutions to the various problems in the Eurozone. Also attending will be the U.S. Secretary of the Treasury; many believe he will present a possible solution to shoring up the emergency bailout fund, which has been the worry of investors for its inadequacy, especially if the major Eurozone players such as Spain and Italy, go bankrupt.

As reported at 2:51 p.m. (JST) in Tokyo, the Euro was trading against the U.S. Dollar at $1.3861, slightly off the 1-week high of $1.3937 struck yesterday after the announcement, and following the 7-month low of $1.35 hit on Monday.