Article by AlgosysFx Forex Trading Solutions
The Euro maintained gains versus the British pound in the previous European trading exchanges as European Union President Herman Van Rompuy said that the Euro Zone’s rescue fund is prepared to extend financial aid to struggling Spanish banks. The single currency was also lifted by comments from the European Central Bank (ECB) that President Mario Draghi would not be attending the Jackson Hole Symposium this weekend.
With hopes still up for a possible ECB intervention in the markets, the shared currency is expected to advance from the Sterling in today’s European trades. Reports emerged that Draghi would not be able to attend the upcoming Symposium, citing a heavy workload as he prepares for September 6’s key policy meeting. From this, it could be drawn that Draghi is focusing on setting the details of proposals that would be revealed at next week’s crucial meeting, passing the market’s attention to Federal Reserve Chairman Ben Bernanke for clues of another monetary easing to support the US economy. Remarks from the EU president are likewise expected to buoy the common currency, reinforcing the European officials’ willingness to help troubled member nations. Yesterday, borrowing costs at a Spanish Treasury bill auction fell sharply, a sign that investor confidence could possibly return.
In Britain, house prices fell by 0.1 percent in August, boosting speculations that the Bank of England (BOE) would increase bond buying to trigger economic growth. Given that expectations remain elevated, the EURGBP pair is projected to go up, suggesting a long position in today’s European exchanges.
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