Euro Firms as Markets Focus on Eurozone

Barbara Zigah

By: Barbara Zigah

The Euro is seeing some positive momentum in the Asian trading session on investor hopes of a definitive resolution to the European debt crisis as a crucial summit begins later this week. The new prime minister of Italy, Mario Monti, also introduced a new €30 billion austerity package which is going some way to restoring confidence in the third largest Eurozone economy. Nonetheless, analysts expect that markets players will be wary and won’t push the markets too much, especially as the European Central Bank’s policy meeting on Thursday could yield an interest rate cut. Markets are already considering the possibility of a rate cut by some 25 basis points.

One asset management strategist in Tokyo pointed out, however, that any gains in the Euro which might be eked out as a result of positive sentiment will go head-to-head with the squaring of year-end positioning. He expects to see some sell-off and profit taking as financial institutions work to shore up their core capital positions. As reported at 11:10 a.m. (JST) in Tokyo, the Euro was trading as high as $1.3435 following the news of the Italian austerity package, but has since retreated to $1.3404.

Barbara Zigah

After working on Wall Street, Barb began her second career as a freelance writer at Daily Forex, where the CEO recognized fresh, untapped potential and was willing to give her a try. She’s never looked back. Since then, she’s worked steadily as a freelance writer and editor in the financial services and Forex-related industry.

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