EUR/USD has biggest weekly gain in 20 months

FXstreet.com (Córdoba) – The Euro ended the week with gains across the board and was the best performer among majors. EUR/USD fell on Monday to 1.2870, 3-month low, but reversed sharply and rose more than 500 pips, reaching on Friday at 1.3456 the highest price in a month. The pair posted the biggest weekly gain since May of 2009.

“The currency gained over 4 percent during this week, prompted by a reside of sovereign debt issues in the Euro-zone, a fore coming hike in interest rates by ECB, and weakening economic conditions in the United States”, said Andrei Tratseuski from Forex Club.

Among reasons for the upside rally in the Euro, analyst at the Danske Bank mentioned the ECB and its policy meeting. “President Trichet made it clear that the ECB is still closely monitoring inflation, even though the current inflation rate is mainly due to higher energy and food prices. Trichet even went as far as to refer to the rate hike in June 2008, just before the financial crisis erupted, as proof that the ECB is ready to act even under difficult conditions”.

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