Euro Reaches New Yearly High in Forex Trading

Euro can’t seem to build support at 1.4600

The euro appears to be trying to break out in forex trading on the currency market. Indeed, on news earlier that China is doing better than expected, the risk rally resumed in currency trading. EUR/USD reached 1.4625 before falling back to the 1.4600 level.

Despite the best efforts by the euro, it is still having trouble forming a solid support at 1.4600 — and then overcoming that level. The economic news is reasonably good for now, especially in China, but the question is whether the current growth can be sustained. GFT’s Boris Schlossberg addresses this issue in FX360:

The question going forward however is whether such growth is sustainable and on that issue we continue to remain skeptical. Such massive expansion of debt could prove highly problematic for the Chinese economy if export demand does not pick as the year comes to a close, making debt service of the massively larger loan base considerably more difficult as 2010 arrives.”