Forex Flash: Euro reaches 7 month high against Greenback – Wells Fargo

FXstreet.com (Barcelona) - Nick Bennenbroek, Head of Currency Strategy at Wells Fargo notes that the Euro reached a new seven month high against the dollar today.

He writes, "Eurozone data was constructive, including a rise in Germany's December business confidence and firmer capital inflows into the Eurozone. The European Central Bank also said that bonds issued or guaranteed by the Greek government would be eligible again as collateral for liquidity operations. European equities are up and peripheral bond markets are stronger, mirroring the Euro's gains. Favourable European sentiment is also helping the Scandinavian currencies and the pound, while the emerging European currencies are generally stronger."

Moving to the US, Bennenbroek notes that in the US, there has been a temporary pause in terms of new developments for the US budget talks, Nonetheless, he feels that with recent progress, investors remain hopeful that a deal can be reached in a timely manner. He finishes by commenting, "While further foreign currency gains are possible given thin trading conditions, in the bigger picture we believe that current strength of the Euro and the pound will provide a selling opportunity."