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EUR Gains May End Up Being Temporary
Submitted by Forexyard on Thu, 21/06/2012 - 07:34
The euro saw gains against both the US dollar and Japanese yen during European trading yesterday, as news that Greek political parties have agreed to the makeup of a new government following elections over the weekend led to an increase in risk taking.
The EUR/USD gained more than 50 pips over the course of the day, eventually reaching as high as 1.2723. Meanwhile, the EUR/JPY moved up over 100 pips, eventually hitting the 101.11 mark.
Turning to today, analysts are warning that with attention shifting back to the debt problems in Spain, the euro may reverse yesterday's gains. Spanish government bond-yields recently spiked over 7%, leading to worries that Spain would soon require a much bigger bailout than originally thought.
Additionally, recent German news indicates that the euro-zone debt crisis may be spreading to the region's largest economy. Any further negative German indicators could result in heavy euro losses.