Euro (FXE) Ends Week Significantly Higher
The Euro (EUR) rallied today to close the week with big gains against most of the currencies, while reaching the highest level for the year against the US Dollar (USD) as investors continued to price in rate hike by the European Central Bank in April.
The major factor for the rally was reassuring comments by the ECB president Jean-Claude Trichet that they continue to follow very closely the inflationary pressures in the Euro zone. The cease fire announced by the Libyan government after the UN resolution of no fly zone over the country also helped to increase the risk appetite among investors, while the rare agreement to act against a strong Japanese Yen (JPY) by G7 countries also boosted the Euro.
The EUR/USD reached new highs for the year, breaking through the important psychological level of 1.4 and closed the week at 1.4167, the highest close since last November. The EUR/JPY currency pair, meanwhile, soared from 111 to 114.39, thus erasing all the dramatic losses for the week.
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