The common currency steadied during the Asian trading session, holding onto gains made on Thursday after Mario Draghi, the head of the ECB, vowed that he would do all within his power to preserve the Euro and prevent a Eurozone breakup. For analysts that signaled the central bank’s willingness to ensure that borrowing costs in Spain and Italy won’t continue to escalate and suggested that the bank might be willing to put a floor beneath the common currency which would stave off further deterioration.
As reported at 9:42 a.m. (JST) in Tokyo, the EUR/USD pair was trading at $1.2276, slipping just off $1.2330, a 2-week peak struck overnight; support is seen at $1.2395 while resistance is at $1.1193.
Later today, markets will watch for the release of U.S. GDP figures for the second quarter, and the consensus of analysts is calling for growth of 1.5%, slipping from 1.9% recorded during Q1. A lower than expected outcome will likely raise expectations of easing from the Federal Reserve again, though a better than expected number won’t necessarily alter investors’ hopes. Most analysts believe that the Fed’s commitment to full employment as part of their dual mandate won’t be achieved unless and until QE3 is rolled out.