The Euro, still riding out a bullish trend following unveiling of a bailout plan for Greece, was able to extend its gains against the USD in trading yesterday. Following a downbeat assessment by the Fed Chairman regarding the prospect of a U.S. interest rate hike, the Euro shot up against the Dollar some 80 pips. Currently, EUR/USD is trading around the 1.3650 level, relatively unchanged from yesterday afternoon. With risk taking still the prevailing sentiment among investors, the Euro will likely maintain its gains for the time being.
With no significant European news events scheduled for the rest of the week, any significant movement by the Euro will likely be dependant on how well the U.S. economy performs. Traders should be warned that any better then expected news from the U.S. will likely mean the Euro could drop against the Dollar. The Euro-zone is still in very fragile territory. It would not take much to send the single currency back into turmoil.