Pressure Builds for the Euro

Barbara Zigah

By: Barbara Zigah

The Euro managed to hold steady in Asian trade, but analysts say it remains vulnerable as the week progresses and two key debt auctions loom. As reported at 12:31 pm, the Euro was trading at $1.2767, rebounding from $1.2666, the recently struck 16-month low. Market players have said that an option barrier set at $1.2650 has precipitated some short-covering moves in Asia. Strong support for the Euro is seen just below $1.2600, and on the upside some stop-loss bids are seen at $1.2790 and beyond that $1.280.

Several key events will be occurring this week, besides the Thursday and Friday debt auctions, including an ECB policy meeting. It is likely that the ECB will put renewed pressure on the Eurozone governments to work harder to resolve the debt crisis. The ECB has reported that overnight deposits have continued to climb, and are regularly striking new highs; on Monday, commercial banks deposited nearly €464 billion with the central bank. The ECB’s most recent offering of longer-term loans saw strong demand, but it is a near certainty that this outcome – using the funds for deposits rather than loans – was not the ECB’s intention.

Elsewhere in the Eurozone, the resignation by the head of the Swiss National Bank sent the Euro lower against the Swiss Franc, as traders believe the Euro peg could be tested. The Euro earlier traded against the Swissie at 1.2111 Swiss Franc.

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.

Did you like what you read? Let us know what you think!

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

0 User comments

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

Read more
Add new comment
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.