Euro helped by strong production report

The euro is trading at $1.3589, up 0.3% against the US dollar, after eurozone industrial production in August surpassed expectations.

Traders were encouraged to buy the euro after industrial production grew by 1% against July’s reading, while economists expected an increase of 0.8%.

Eurozone finance ministers meet in Luxembourg today, where one of the topics for discussion is the possibility of Ireland leaving the bailout programme in December. EU economic commissioner Olli Rehn said Ireland may leave the programme without needing additional funds. Should Ireland becomes the first country to leave the bailout scheme the euro could push higher.

Traders remain worried about the debt-ceiling deadline in the US, where the Democrats and Republicans are still yet to reach an agreement ahead of Thursday’s deadline. There is a possibility that both parties might agree to a temporary increase of the debt ceiling, which would buy them more time. However, dealers believe even a short-term increase could lead to a credit-rating downgrade, which could weigh on the US dollar.

Spot FX EUR/USD (DFB) chart

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