EUR Trading Outlook (07-09-2012)
The Euro (EUR) Draghi didn’t disappoint overnight announcing a large broad scale unlimited bond buying program to target the 1-3 year maturities. Dubbed the Outright Monetary Transactions (OMTs) the plan is stop traders betting against the Eurozone. Some questions remain about the legalities of the OMT and some opposition remains from Germany who believe the plan is tantamount to financing government deficits. Italian and Spanish yields did drop however and this is the main intent of the Plan. EUR/USD is strong but has already rallied in anticipation of the plan and is finding resistance near 1.2650.
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