Forex Today News EUR Wednesday 12.11.2013

Forex Today News EUR Wednesday 12.11.2013.

The Eur jumped to a six - week peak versus the U.S. dollar on Tuesday as rising expectations about the euro zone's banking agreement. Meeting of European Union finance ministers in Brussels reportedly getting closer to an agreement forming a banking union, which will help banks to anticipate the Euro zone economic crisis. On the monetary policy side, the combination of less dovish statement and signals the absence of negative interest rates from the last policy meeting of the ECB also continued to prop up the Euro.

" We'll soon see Eur breakout and test the $1.39 to see it," said Andres Bergero, chief corporate trader at Bank of the West in San Ramon, California. The euro zone economy looks still quite fragile, but not as bad as before. Majority of market participants feel if the conditions have been a little better and a little more stable in Europe.

EURO currency reached the strongest level in almost six weeks against the greenback as a report showed industrial production expanded and Italy stopped shrinking economy, boosting optimism the recovery in the euro area. The euro rose more than 1 % against the dollar since the day before Europe's central bank refrained from introducing negative interest rates at a meeting last week. Meanwhile the Swedish krona, the currency fell to its lowest level in 18 months against the Eur after the country's industrial production fell.

"The meeting of finance ministers focused on single resolution for banking mekannismen" said Sireen Harajli, an analyst at Mizuho Bank in New York. There are some expectations that may be able to achieve it in some agreement by the end of this year, which can help strengthen the euro. Recent report of Eurozone finance ministers said that the EU seems more likely to take political steps in creating a banking union to cover the activities of the European banks that failed.

To establish a banking union as early as 2015, the ministers must reach agreement by the end of this year. Thus, there is still time for further negotiations with the European Parliament, in April 2014.

" I believe that a political agreement is most likely done at this time. If no further legal work to be done after that," said French Finance Minister, Pierre Moscovici, as reported by Reuters on Tuesday ( 12/10/2013 ).

While it is well known, the European Central Bank ( ECB ) at a previous meeting again kept its benchmark rate at a record low of 0:25 %, as expected by many analysts.

The ECB's decision following the ECB's surprise move to cut the refinancing rate by a quarter point in the previous month, to counter the threat of deflation that is toxic to the economy of this region.