Currencies markets are very volatile and fluctuating heavily amid the mixed sentiment seen in the market, as we can see the euro rebounded after reaching the lowest today, affected by comments from the European Union and the International Monetary funds regarding Greece obtaining the next tranche of 2010's bailout package as soon as possible.
More comments were made today, where the European Commission President, Jose Barroso said that the European leaders will be able to reach an agreement this weekend to leverage the European Financial Stability Facility in attempts to fight the debt crisis and prevent it from expanding into larger economies within the zone, which supported a wave of optimism to replace the general pessimism seen earlier.
The European Financial Stability Facility is expected to be used in terms of buying sovereign bonds in the secondary market, providing indebted nations with bailouts and finally securing the European banking sector as leaders will discuss banks' recapitalization.
The European Union and International Monetary Fund recommended that Greece should obtain the next tranche as soon as possible despite the fact that Greece will not reach any of the targets set in 2011, yet it will be able to achieve them in 2012, where the nation is to apply further austerity measures to control the deficit and meet targets.
Markets are fluctuating heavily in the European session due to the heavy comments and fundamentals, where investors have all their eyes concentrated on Europe, which remains the center stage ahead of the October 23 summit and the finance ministers' meeting tomorrow.
The U.S. dollar index (USDIX) fluctuated heavily during the session today to currently trade lower than the 77.08 opening level, where after setting the highest at 77.43, the index retreated to a low of 76.70 amid the strengthening euro and pound, and is currently hovering around 76.85.
On the other hand, the euro gained strength against the U.S. dollar and the sterling pound amid the slight optimism that leaders will solve the debt crisis on the coming summit, where the EUR/USD pair opened the session in Asia at 1.3759, and recorded a high of 1.3842 and a low of 1.3672, and is currently hovering around 1.3805.
Moreover, the EUR/GBP pair opened the session today at 0.8721, and set the highest at 0.8766 and the lowest at 0.8708, and is trading now around 0.8746.