Euro Gains May be Temporary

Positive comments from an official at the European Central Bank regarding the euro-zone's ability to combat the debt crisis in the region resulted in risk taking in the marketplace, which in turn led to broad gains for the common currency. The EUR/USD was up over 100 pips over the course of the day, reaching as high as high as 1.2169 before staging a downward reversal. The pair found support at the 1.2130 level. Against the Japanese yen, the euro saw gains of around 95 pips to peak at 95.18 before correcting itself toward the end of European trading. Today, euro traders will want to continue monitoring any developments and announcements out of the euro-zone. Analysts are warning that given the current state of the Spanish economy combined with fears that the region's debt crisis is impacting Germany, any gains the euro makes are likely to be temporary at best. Furthermore, if any of today's news out of the US shows growth in the American economy, the euro could see losses against the dollar in afternoon trading.

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