Monday, 28 Dec 2009 The Euro saw an extremely bullish session during last week's trading. The Euro rose close to 200 pips against the Pound and over 200 pips against the Yen. In addition, the Euro even managed to climb against the Dollar, as the EUR/USD pair reached above the 1.4400 level.
The Euro's bullish trend from last week wasn't caused by an extraordinary economic data from the Euro-Zone. The most significant positive publication from the Euro-Zone was the German Import Prices report. The report showed that the price of imported goods purchased domestically rose by 0.4% during November. A rising inflation in Germany, which holds the strongest economy within the Euro-Zone, usually has a positive impact on the Euro, as investors interpret it as a sign that the economic recovery is in place.
In Addition, it seems that the strengthening of the Euro was a reaction to the weak currencies. The main reason for the Euro's appreciation was the negative housing data from the U.S. It seems that for as long that the U.S. economy will provide disappointing data, the Euro is likely to strengthen a result.
Looking ahead to this week, many impacting news events are expected from the Euro-Zone. Traders are advised to focus on the M3 Money Supply, scheduled for Tuesday 09:00 GMT. The report shows the change in the total quantity of domestic currency in circulation and deposited in banks during November. If the end result will show that this indicator continues to rise, it could strengthen the Euro further.