Analysts say that the Euro could see its single largest daily rally today as investors’ relief over Spain’s request for assistance to aid its banking sector grows as markets in Europe and then North America open later today. Spain requested that help yesterday, and the E.U. will lend the fiscally troubled nation up to as much as €100 billion.
As reported at 12:08 p.m. (JST) the EUR/USD was trading nearly 1% higher at $1.2635, moving further from the 2-year trough struck earlier in the month; earlier, the pair had struck $1.2672, the highest price in better than two weeks. Analysts say that it is possible that the rally could push the pair to $1.2837. The Euro was also higher against the safe haven Japanese Yen, trading at 100.90 Yen, again a more than 2-week high, as risk appetite improves.
Also helping sentiment was better than expected Chinese data; last week’s surprise rate cut by the People’s Bank of China had investors speculating that it had been done as a preemptive move to support what many expected to be dismal data. The Australian Dollar caught a boost from that news with the Aussie briefly striking above parity before retreating; the AUD/USD was last at $0.9970 still a gain of 0.6% for the session.