Currency News | Euro Currency News | Euro Currency Analysis » US Rate Cut http://eurocurrencynews.com Forex blog about daily euro currency news and analysis Mon, 14 Dec 2009 12:19:19 +0000 http://wordpress.org/?v=2.8.6 en hourly 1 Euro Benefits from U.S. Rate Cut http://eurocurrencynews.com/euro-benefits-from-us-rate-cut/ http://eurocurrencynews.com/euro-benefits-from-us-rate-cut/#comments Thu, 18 Dec 2008 09:35:23 +0000 admin http://eurocurrencynews.com/?p=54 The EUR has been the primary benefactor from the cut in U.S. Interest Rates as the EUR’s bullish run continues into its 9th day. Other factors driving the EUR higher in recent days have been an increase of negative economic data flowing from the U.S. economy. A string of poor unemployment numbers, combined with the Federal Reserve’s negative outlook on the economy has sent the EUR/USD to its highest level in 3 months.

Another factor adding to the EUR gains have been low liquidity in the currency markets. As the holidays and end of year approach, currency markets tend to lose their liquidity. Therefore trends tend to be multiplied. Also the recent appreciation of the Dollar during the financial crisis had many traders bullish on the Dollar. Traders who have been long on the Dollar needed to reverse their positions in order to jump on the trend of the falling Dollar. This may have had the effect of amplifying swings in the market, sending the EUR/USD even higher. If these trends continue, the 1.5000 mark may be reached. This level has not been seen since August, just one month before the world was gripped by a financial crisis.

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