The U.S. dollar had made massive gains last week as investors fled to the safe have currency. We had been following the dumping of emerging market currencies in particular. Renewed hope that the eurozone is going to expand and ratify the EFSF, and Merkel’s commitment to helping Greece meet the terms of its bailout agreement caused global markets to rally and whetted investors’ risk appetite.
That combined with weak U.S. consumer confidence data, drove the euro up against the dollar.
The euro traded as high as $1.3667 today, but has lost some of those gains and is trading close to $1.3595 now.
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