Euro gets some needed support but for how long?

The euro held gains Wednesday after Catalonia’s leader held off declaring independence from Spain while Asian markets pushed higher following another record close on Wall Street.

The single currency has come under strain since Catalans voted in an unofficial referendum on October 1 to break away from Madrid, fuelling fears about one of the eurozone’s biggest economies.

However, the region’s leader Carles Puigdemont stepped back from declaring independence in a speech Tuesday, calling for talks to resolve the country’s worst crisis in decades.

While Madrid’s equity market retreated the euro broke back above $1.18 for the first time since the day after the vote and in Asia it held up, buying $1.1815 having wallowed near $1.1700 on Friday.

A strong German export report also provided support to the euro.

However, it is still down two cents from its recent highs seen last month, with uncertainty continuing to dog the unit.

Stephen Innes, head of Asia-Pacific trading at OANDA, said that while the euro rose it “gained little traction as this is little more than kicking the can down the road. It’s unlikely we’ve heard the last of this debate despite cooler heads prevailing”.

Yahoo News via AFP

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Stephen Innes

Stephen Innes

Senior Currency Trader and Analyst at OANDA
Stephen has over 25 years of experience in the financial markets and specializes in Asian currencies at OANDA. After having started his trading career with NatWest Bank, he is currently based in Singapore as a Senior Currency Trader and Analyst with OANDA, focusing on the movement of the Aussie Dollar and ASEAN Currencies. Stephen has an extensive trading experience in Interest Rate Futures, Money Markets and Precious Metals. Prior to joining OANDA, he worked with organizations like Cambridge Mercantile, Nat West, Garvin Guy Butler, Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes
Stephen Innes

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