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Euro Gives Back Some Gains after Greece Downgrade

Discussion in 'Forex Daily News & Outlook' started by forextrends24, Jun 14, 2010.

  1. forextrends24

    forextrends24 New Member

    Mar 27, 2009
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    Today’s sample of Forex Analysis from ForexHound.com

    The Euro surged early in the session on Monday as upbeat feelings about the global recovery helped drive up demand for higher risk assets. Today’s strong rally was a continuation of last week’s bottoming action which was triggered by positive comments from Fed Chairman Ben Bernanke and European Central Bank President Jean Claude Trichet.

    Bernanke told the Senate last week that he believed that Europe has the money to protect its currency from collapse. The market rallied on his comment because it meant that Europe would use all means to prevent sovereign debt issues from escalating. Trichet said the ECB would not increase stimulus in the economy. This meant the economy was strong enough to not require any additional aid from the central bank. Both comments were supportive to the Euro.

    Late in the session, the Euro broke from its high but still managed to hold on to most of its gains. News of a downgrade of Greece debt by Moody’s made weak longs nervous, triggering a profit-taking break. Many traders feel that the break was unnecessary because the move by Moody’s was based on old news. Investors also feel move optimistic about the Greece’s future finances.

    Read full article at ForexHound.com as well more Forex Trading articles including Forex Technical Analysis and Forex Education

    Disclaimer: Trading foreign exchange on the margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore should not invest money that you cannot afford to lose.

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