Investing.com - The euro pushed higher on Monday as markets shrugged off concerns over escalating trade tensions as signs of strength in the U.S. economy bolstered risk appetite.
EUR/USD was up 0.24% to 1.1687 by 04:14 AM ET (08:14 AM GMT), reversing almost all of Friday’s losses.
The euro pushed higher as concerns over the political situation in Italy subsided after anti-establishment parties reached a deal on a proposed coalition government, which eased fears that repeat elections could give a mandate for the country to exit the euro zone.
Traders brushed aside fears over a global trade war as the improved political situation in the euro area and Friday’s robust U.S. jobs report continued to bolster market sentiment.
Data on Friday showed that U.S. jobs growth gained momentum and wage growth rose in May, cementing expectations for a June rate hike by the Federal Reserve and bolstering expectations for a fourth rate hike this year.
Trade tensions flared up again after finance ministers from the world’s leading economies criticized America’s new tariffs on steel and aluminum imports at a G7 meeting in Canada over the weekend.
Meanwhile, weekend talks between the U.S. and China on trade ended without a breakthrough, raising the danger that negotiations could collapse.
The dollar was a touch lower against the safe haven yen, with USD/JPY edging down to 109.46 from an overnight high of 109.77.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.18% to 93.99 after rising 0.22% on Friday.
The pound was little changed against the dollar, with GBP/USD last at 1.3351.
The risk sensitive Australian dollar was higher, with AUD/USD gaining 0.82% to trade at 0.7629, while the New Zealand dollar was also higher, with NZD/USD up 0.43% to 0.7012.