Euro Break 1.2300 on Rising Hopes of ECB Action

U.S. Dollar Trading (USD) although there are still plenty of doubts remaining about the new Eurozone measures yet to be announced optimism won out in the end on Friday and we saw fresh week highs on the EUR/USD into the weekend. US Q2 GDP met expectations at 1.5% Q/Q annualized. Speculation is mounting that QE3 will be announced by the FED this month to help stimulate a stumbling US recovery and this speculation is helping US stock markets to be very strong in recent sessions. Looking ahead, no US data today.(FOREX Daily Outlook by

Japan’s Nikkei stock average rose 1 percent.

The euro edged up 0.2 percent to $1.2285,, still below a three-week high of $1.2390 touched on Friday but well above a two-year low around $1.2042 reached last week. The euro was also up 0.2 percent against the yen at 95.95.

The Australian dollar hit a four-month high against the U.S. dollar around $1.0537 on Tuesday and an all-time peak versus the euro around A$1.1646 in offshore trade, as speculation of monetary stimulus spurred investor appetite for high-yielding currency.

But caution remained about the effect of any measures from the ECB, given doubts that central bank action will be sufficient to resolve the euro zone’s fiscal woes.