Euro Gains on Wednesday over Positive Development on Euro Zone’s Debt Situation

The single currency was stronger on Wednesday as positive hopes prevailed among investors on the euro zone’s debt situation. Traders were optimistic about the summit in Brussels on Thursday where French President Nicolas Sarkozy and German Chancellor Angela Merkel have met to find a solution of Greece’s debt problems. Senior market analyst, Andrew Wilkinson from Interactive brokers commented, ”Dealers felt assured that [a European Union] summit on Thursday would deliver some sort of lasting resolve for the Greek debt situation.”

The euro jumped to 1.4230 against the greenback on Wednesday as compared to 1.4125 on Tuesday’s North American trading session. The 17-nations shared currency touched the day’s high of 1.4239 yesterday.

The dollar index DXY which measures the greenback’s performance against its major six rival currencies declined to 74.788 on Wednesday as compared to 75.210 on Tuesday’s late trading hours.

The US dollar also declined versus the Japanese Yen to 78.76 on Wednesday as compared to 79.25 on late Tuesday. The British Pound did saw some correction in Asian trading hours as analysts expected more support for quantitative easing measures by Bank of England in its latest meeting. However the option of asset purchase was totally rejected and 7 of the committee members decided to leave the current lending rate unchanged at 0.5 percent. 8 of the committee members decided to leave the current asset purchase programs also unchanged at 200 billion pounds.

Later in US trading session the Pound Sterling advanced to 1.6164 against the US dollar on Wednesday as compared to 1.6112 on Tuesday.

The Australian dollar also slightly gained versus the greenback to 1.0745 as compared to 1.0721 on late Tuesday.

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