EU Morning Report - Risk appetite boosts the euro

The euro (EUR) appreciated against most of its major counterparts, as market participants risk appetite remained intact and recent developments, both in the eurozone and the US, favored buying of the single currency. The European Central Bank (ECB) President Draghi revealed their bond-buying program, called Outright Monetary Transaction (OMT), while the Federal Reserve Chairman Bernanke announced a third round of quantitative easing (QE3) by which the central bank will be purchasing mortgage-backed securities (MBS), while keeping interest rates near zero until 2015. In contrast, the effects of the above were negative for the greenback as it has been sold heavily. The Economic and Financial Affairs Council (ECOFIN) meeting took place in Cyprus on Saturday, emphasized on the implementation of a single bank supervision body but no major agreement was produced.

§ The euro (EUR) above to 1.3168 against the US dollar (USD), a 4-month high and recorded a monthly appreciation of 4.4% so far.

§ The Australian dollar (AUD) piped over a resistance area versus the US dollar (USD) on Friday, rising to 1.0624, but did not manage to hold above that level.

§ OIL finally broke out of its days-old range, and even traded above the 100 USD level. The uptrend remains strong and the 98.30 area is expected to act as a support.

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