USD Gets a Reprieve through Weak Data, Euro Takes Hit

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Multiple rounds of easing had improved the position of the Euro against the United States dollar even though there was no substantial gain over the last few weeks. However, the Euro was really weak and it registered its biggest loss in probably over a month’s time. The Euro was depending heavily on the surveys that would indicate if business had picked up or dropped in the Euro zone. But the data was not encouraging and it showed that the business in Euro zone still remained weak. This is despite the efforts of European Central bank, and bold ones at that, to stabilize the situation in the Euro zone.

Euro Registers 2% fall since Monday

The start of this week had some encouraging signs for the Euro and the most volatile currency in the world at this point of time had reached 120 days high by hitting the $1.3173 mark in Monday (17th September, 2012). On 20th September, the Euro was on $1.2920, a 0.6% fall from the previous day. To make matters worse, the Euro lost ground against the Australian dollar too. The currency stood at AU$1.2405 on 20the September by the end of the market day.

Trend To Continue According To Experts

Daily FX currency analyst, David Song, said that this trend is most likely to continue in the future too. He said that Euro will definitely face more headwinds as the real economy is still badly hit by the crisis and it will drag on for a couple of months at least. There is also speculation that the Greek government is neck deep in trouble and they have to make major changes to the way in which they are structuring their debt. He said that the government will definitely face problems in while paying the next installment of the bailout payment.

Yen Ploughs Ahead Stronger Than Ever

In spite of the losses the Euro registered, the Yen continued to go strong and registered some small gains over other currencies. This might be a cause of concern for the officials from Bank of Japan as it might jeopardize their bond buying spree.

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