The EUR USD is 0.872% lower with 1 EUR = 1.3871 USD. The Euro made strong gains across the board yesterday, as EU leaders agreed on a revamped bailout package for the Euro-zone's most indebted nations. The single currency rose for a second day against the Dollar and looks to poised to re-visit long-term resistance in the region of 1.40. Regional leaders agreed to widen the scope of the rescue fund and cut the cost of loans to Greece. The announcement fuelled optimism that finance ministers would do what was necessary to resolve the sovereign debt crisis. Coupled with intense speculation of an interest rate increase in April, the Euro made widespread gains against all of the 16 most actively traded currencies yesterday and a further upside move is likely in the short-term. However, the key driver at present is certainly risk aversion which is tied into the Japanese situation. It is a very fluid situation in Asian trading. As this crisis moves into one of potential radiation fallout, panic is ensuing in several markets. It is still true that FX markets are relatively calmer, but one wonders if this will last. The USD/JPY is largely unchanged. The market is wary of intervention to stabilise the USD/JPY should risk aversion and repatriation drive it down. But equally the market may be unsure if the situation requires capital flight from Japan and a weaker JPY.

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