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

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes