Euro Set for Second Week of Gains

An interesting week all around as far as the economic world goes.  So far, with half the day gone in London, the euro has namaged to nudge close to a three-week high.  This has been down to investors trimming their sell positions and heading away from the US dollar, as well as renewed calm surrounding the Spanish economy.

After initial fears about Spain’s ability to deal with its large deficit, an auction of government bonds this week saw healthy demand.  This calmed investors, who sensed that the country does show signs of being able to deal with its finances.

Another interesting twist was the US dollar’s lower demand.  This was down to worse-than-expected US economic data which left investors either head back for something a little riskier or going for the favourite ‘safe’ asset – gold.

The precious metal hit new records on Thursday, getting to well over US$1,245 an ounce.  Today, it could hit this record again.

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