Why Did a Major World Currency Rally on Vague Promises?

Jean-Claude Juncker told reporters in Paris on Tuesday that a new definitive plan would be unveiled to bailout Greece "by the end of June", according to Bloomberg. In his statements, he ruled out the possibility of a "total restructuring" of Greek debt. He did not, however, rule out a partial-restructuring. He mimicked statements made by French President Nicolas Sarkozy last week when he addressed private sector involvement in a Greek bailout. Juncker added that the group of finance ministers he represents would wait for decisions by the European Central Bank and the IMF before proceeding. The euro rallied against the U.S. dollar on Tuesday, moving up nearly a full percent against the greenback, following Juncker's statements. Are the markets biased? Are traders making decisions based on vague glimmers of hope? Of course, the entire recent euro saga has, in large part, been built on rumors and speculation. The euro depreciated against the dollar last week when Juncker himself stated that the IMF may not be able to offer Greece additional financial assistance. Traders expecting a reversal in Tuesday's euro strength might consider ProShares UltraShort Euro EUO. EUO may do well if the euro reverses trend and declines.