Market Reaction to EU-IMF's Stability Package and ECB's Easing Measures

[Forex-Outlook]

Market reaction to EU-IMF and ECB's measures to contain European sovereign crisis and to arrest euro's selloff was positive, albeit lacking momentum. The euro surged initially, breaking above 1.3 against the dollar and 120 against Japanese yen. However, the rally lost steam as ECB's accommodative stance might delay the first rate hike and investors worried the Eurozone will experience a double-dip recession as long as fiscal problems are unresolved.

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