Currencies are very volatile ahead of the European Summit tomorrow

By @ibtimes on

Major currencies fluctuated heavily today against the U.S. dollar ahead of the European leaders' final summit tomorrow, with all eyes focused on the possible measures that could be taken by leaders to tackle the debt crisis, while the focus will also be on the German parliament, where Merkel seeks parliamentary vote of confidence to bolster the European Financial Stability Facility.

We saw how optimism dominated the market yesterday, while markets are looking forward to the summit tomorrow with hopeful eyes that European leaders will finally provide a mechanism to heal the two-year old debt crisis; however, currencies are fluctuating heavily with lack of major fundamentals from Europe today.

The German Chancellor, Angela Merkel seeks a vote of confidence from the lower house of parliament for new EU measures, with indications that Merkel seeksto expand the European Financial Stability Facility (EFSF) firepower.

European leaders are seeking to recapitalize banks with 100 billion euros and expanding the European Financial Stability Facility to more than 1 trillion euros, according to Juergen Trittin, co-leader of Germany's opposition Greens Party.

The euro fluctuated heavily against the U.S. dollar after the opening in Asia at 1.3928, recording the highest at 1.3959 and the lowest at 1.3877, and is currently hovering around 1.3916.

Moreover, the sterling pound also followed the euro and fluctuated heavily against the U.S. dollar, where after opening the session in Asia at 1.5996, the GBP/USD pair set the highest at 1.6022 and the lowest at 1.5963 and is trading now around 1.5997.

The U.S. dollar index (USDIX), which tracks the dollar's movement against other major currencies, is trading today within narrow levels, yet fluctuated heavily within this range, where after the opening of 76.07, the index recorded a high of 76.28 and a low of 75.94, and is currently trading around 76.10.

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