Currency Note Euro

Euro continues to rally

By Ricky Bean December 11th, 2014

It was another day of subdued gains for the euro yesterday as its positive week continues. Logging gains against the majority of its peers, most notably against the US dollar and sterling, the euro managed to shrug off the unsettling news out of Greece that a snap election had been called. There is a certain amount of nervousness around the situation in Greece, with the far left Syriza Party being strong favourites to be voted in to power. The result of such a turn of events, markets are speculating, is that either the EU will be forced to write off Greece’s debt, or that we will see Greece become the first member-state to exit the Eurozone since its inception. The implication of a Greek exit could be considerable in terms of the future of the Union, you just have to think of the Scottish Independence vote and its impact on sterling, and as such markets will be watching closely.

Today we have some interesting fundamental releases to keep an eye on,, most notably inflation figures from Germany and France. We also have the announcement of the EU’s Long-Term Refinancing Option – a scheme introduced in 2011 by the European Central Bank (ECB) whereby banks can take very cheap loans from the ECB. It was introduced to encourage banks to lend and hence stimulate growth. Today the ECB will announce the amount of funds it will make available for the commercial banks – forecasted around the €148bn mark. Any figures considerably above this could trigger some euro strength.