Fundamental Analysis Forex
December 3, 2012 @ 9:32 pm

Euro rallies on improved European outlook


The euro surged to a six-week high against the dollar on Monday as markets were more confident on a better European outlook. Greece has finally taken action to reduce its debt load with a bond buyback program and Spain formally asks for European funds to recapitalize banks.

These news headlines today eased concerns about those debt-burdened countries. The single currency was also buoyed by a business survey released today showing the euro zone’s manufacturing sector contracted a little less rapidly in November.

Sentiment in the euro was also helped by reports that German chancellor Angela Merkel has indicated that haircut or write down on Greek debt cannot be ruled out in the relatively near future.

 

“If Greece one day again manages with its revenue without getting new debt, then we must look at and assess the situation. That is not the case before 2014-15 if everything goes according to plan,” Merkel commented in Germany’s newspaper Bild and Sonntag.

 

Also boosting risk appetite was news earlier in the day of improved China manufacturing data which  eased worries about global economic growth. Chinese manufacturing output grew last month for the first time in more than a year.

 

 

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