Fri, 18 Mar 2011 00:00:00 +0100

Euro rallies Against Dollar and Yen

The euro rallied against the U.S. dollar and the Japanese yen on Thursday's trading session. The euro gained about 170 pips vs. the dollar, and the EUR/USD pair reached as high as the 1.4050 level. The euro also soared against the yen as well, and the EUR/JPY pair is trading near the 114.00 level. The euro's strengthening yesterday was mostly affected by overseas developments. The euro gained against the U.S. dollar after reports have shown that the U.S. economy continues to recover. The U.S. Consumer Price Index rose by 0.5% in February, as food costs reached their highest level since 2008. In addition, initial unemployment claims in the U.S. fell by 16,000 last week, signaling that the labor market recovers as well. This has supported risk-appetite in the market, and as a result strengthened the euro vs. the dollar. The euro climbed against the yen after the G7 said they had agreed to stage a coordinated currency intervention in order to weaken the surging Japanese currency. Looking ahead to today, Traders are advised to follow the German Producer Price Index release, which is scheduled at 07:00 GMT. A positive data might to strengthen the euro further. Traders should also follow all the updates from Japan and Libya, as these are likely to have a large impact on the market for the near future.

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