Exchange traded funds that follow the euro and European stocks are rallying as investors anticipate a detailed plan from leaders to deal with the debt crisis.
Vanguard European ETF (NYSEArca: VGK) has gained almost 14% over the past month as the hope for a solution to the debt crisis remains high. SPDR DJ STOXX 50 ETF (NYSEArca: FEU) has grown 15% over the past month.
In currency ETFs, CurrencyShares Euro Trust (NYSEArca: FXE) has bounced in October following its pullback the previous month.
European leaders have been meeting the past few days and markets are looking for a bailout plan to be announced after the summit wraps on on Wednesday.
“Optimism amongst traders over the European summit grows and overnight data from Asia shows an encouraging rebound,” Jonathan Sudaria, a trader at London Capital Group, said in a Bloomberg report. “No new details from the European summit came out over the weekend, but lots of reports of ‘progress’ from policy makers have been interpreted as positives.” [Euro ETFs Jump Before Weekend Summit]
Markets and investors are looking ahead to Wednesday, when the details of a blueprint for the rescue fund should be laid out in detail. French president Nicholas Sarkozy and German Chancellor Angela Merkel did not have the details for presentation on Sunday at thesSummit, but have reassured the public that the details will be disclosed at the next meeting. [European ETFs Move Higher With All Eyes on Greece.]
Expectations have not been met concerning a plan to urge banks to bolster their economic reserves, and both political leaders have been accused of not committing enough resources to help the ongoing health of the euro.