Euro Reaches New Highs Ahead of ECB Loan Repayment Announcement
Friday morning began with the euro pushing past a new 13 month high as the currency's rally picked up again. The common currency traded at 1.3648 on Friday morning.
The euro rose steadily as investors waited for news from the European Central Bank, which is planning to announce more loan repayments at 11:00 GMT. The repayment of the ECB's emergency three year loans is viewed by most as a sign that the euro debt crisis is easing.
After banks promised to pay a large part of their three year loans early on January 30th, the euro soared. Friday's announcement could cannon the euro to new heights if the January 30 repayment is any indication.
Investors will also be looking for economic data from the eurozone as factory activity from the entire region will be reported at 1:30 GMT. Most analysts are expecting the eurozone to produce weak data, but many are hopeful that the data will show the region has stabilized.
However, with record high unemployment within the eurozone many are wondering if this sudden financial recovery is too good to be true. The answer, according to Businessweek, is that it probably is.
The euro could swing in the opposite direction based on the currency's 14 day relative strength index. The figure, above 70, suggests that the euro's value has increased too much too quickly.
Many are expecting to see the currency experience a rollercoaster ride of highs and lows and finish the quarter near its current price.
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