The EUR gained versus the U.S Dollar on speculation European Central Bank (ECB) policy-makers will today signal that the central bank will keep Interest Rates on hold into next year to aid an economic recovery. ECB member Axel Weber said last week that the central bank has used up its scope to cut Rates. Policy-makers will leave the benchmark rate unchanged at this week's meeting, according to analyst predictions.
There is also an improving sentiment in the Euro-Zone's economic conditions. European economic confidence rose more than economists forecast in June, the European Commission in Brussels reported yesterday, signaling the region's slump is abating. Analysts predict that the ECB will keep Rates at 1% for the foreseeable future. And that might turn the EUR further on the upside.
The European currency has advanced the most in 4 months against the Yen, last traded at 135.56 yen from 135.21 yesterday. When it reached 135.96 for a brief stint yesterday, this was the highest level reached since June 15. The EUR has risen 7.1% versus the Japanese yen this year and doesn't seem to be losing any momentum.