EUR/USD up 0.84%. Why is Euro strengthening?

EUR/USD closed today at 1.1291, up 0.84% from the previous close. It hit the high of 1.1337, which is also the 3-month highest point. The pair moderately declined during European session driven by poor results announcement from Germany, according to which the country’s trade balance surplus was €18.8B versus expectations of €20.2B. Industrial production dropped in December by 1.2%, triggering concerns on the recovery of eurozone. However the pair rocketed to 1.13 levels thereafter.

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One reason behind strengthening Euro and at the same time declining European banking stocks was presented by Steve Englander from Citigroup, according to whom it is possible that the eurozone banks are selling assets abroad and converting the revenues into euro in order to shore up their balance sheets. This may have pushed the Euro higher. However Englander noted that Euro would eventually weaken when eurozone equities were sold off.

The US markets stayed flat today. Below is presented the performance of major US indices:

  • DJIA closed at 16,014.38 (-0.08%).
  • Nasdaq Composite lost 0.35%, finishing at 4,268.76.
  • S&P 500 was down only 0.07%.

The oil prices decline for four days in a row. The WTI Crude dropped 5.89% closing at 27.94 USD/bbl. The Brent Crude was trading at 30.81 USD/bbl as of 5:50 PM EST, which is 6.30% lower than the previous close.

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I’m a finance specialist with 4+ years of working experience, out of which 2 years as a SME relationship manager at Byblos Bank and 2 years as a Finance Director in a Food & Beverage sector. My academic background include BA in economics, MA in finance, CFA Level 1 and F1, F2, F3 level of ACCA. I’m also experienced in Forex/CFD trading and Forex/ Equity markets analysis.

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