Euro continues to impress, claims expert

Forex traders have seen the euro enjoy impressive growth in recent weeks after a disappointing 2011 but investors are likely to remain cautious as a number of variables in the European situation are still uncertain, an expert has argued.

Andy Scott, foreign exchange dealer at HiFX, said the euro had seen off negative predictions over the last few weeks, clocking up five per cent gains against the dollar and the yen since hitting a record low last month.

However, the common currency has struggled at times against counterparts like the pound and the krona, which could indicate a degree of weakness in investor sentiment.

"This appears to signal that the gains are a combination of risk appetite improving and the policy statement from the Federal Reserve which has seen the dollar weaken across the board," Mr Scott suggested.

He added that Mario Draghi's policy statement from the European Central Bank would have an impact on markets tomorrow (February 8th).

European shares hit a six-month high today after predictions of strong economic growth, Reuters noted.

Posted by Greg Secker