Risk Taking Leads to Slight Gains for EUR

Speculations that the Spanish government will soon request a bailout package from the ECB generated some risk taking on Friday, which resulted in minor gains for the euro. That being said, analysts were quick to warn that the common currency was unlikely to see significant bullish movement until a formal request from Spain is made. The EUR/USD was able to advance more than 70 pips during early morning trading, eventually reaching as high as 1.3047, before a downward correction virtually erased its earlier gains. The pair finished out the week at 1.2985. After gaining more than 60 pips to trade as high as 102.09, the EUR/JPY proceeded to drop and eventually closed out the week at 101.44. This week, the main pieces of euro-zone news are likely to be a speech from ECB President Draghi on Tuesday, and an Italian bond auction on Thursday. If the news events signal economic growth in the euro-zone, either through upbeat comments from Draghi or a decrease in Italian borrowing costs, the euro could see gains as a result.

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