The common currency of the European Union held on to gains against the world's reserve currency and the Japanese yen on Tuesday as the chief of the European Central Bank prepares to speak in Italy, according to Bloomberg.
The shared currency remained high against most of its major counterparts after economic data showed Italian industrial output gained more rapidly than economists had forecast. The speech of Mario Draghi might indicate what the body he leads has planned regarding stimulus policy.
"It is a combination of lack of urgency on the part of the ECB and the tighter liquidity conditions that are driving the euro higher," Currency Strategist Alvin Tan with Societe Generale told Reuters on Tuesday. "The year's high of $1.3833 is definitely in play and we could expect it to go even higher."
The euro has advanced more than 1.5 percent against the greenback since last week when the ECB did not follow the unexpected interest rate cut with further policy change, according to Reuters.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.