
Please try another search
By Peter Nurse
Investing.com - The euro has been in demand in early European trade Wednesday, hitting a four-month high after Federal Reserve Governor Lael Brainard hinted at a need for an even easier monetary policy in the U.S.
The dollar also suffered more broadly from a rise in risk appetite after positive test data for one of the lead candidates for a Covid-19 vaccine late, published late on Tuesday.
At 2:55 AM ET (0655 GMT), EUR/USD gained 0.1% to 1.1408, after reaching its highest level since March 10 at $1.1423 earlier in the session. EUR/GBP dropped 0.2% to 0.9060, with sterling helped by stronger than expected inflation figures in June, but the euro had posted a two-week high of 0.9112 late Tuesday.
Additionally, the dollar index, which tracks the greenback against a basket of six other currencies, was down 0.1% at 96.093, GBP/USD gained 0.4% to 1.2595 and USD/JPY was flat at 107.23.
The single currency has benefited of late--it’s up 1.3% against the dollar over the last month--from the perception that the region has handled the Covid-19 crisis better than most.
"Germany, France and Italy have all taken severe lockdown steps and as a result the coronavirus now appears to be under control. The economy could be gradually recovering," said Bart Wakabayashi, Tokyo Branch manager of State Street (NYSE:STT) Bank and Trust, to Reuters.
The economic picture still is grim, however. Only last week, the European Commission downgraded its outlook for the EU economy, saying it would now contract by 8.3% in 2020. However, recent confidence data have tended upward, with Tuesday’s German ZEW survey pointing to continued optimism over the next six months.
Looking ahead, “the forthcoming ECB meeting should not change much, with the discussion/progress on an EU Recovery Fund being a more important short-term driver for the EUR/USD,” said analysts at ING, in a research note.
There still remain doubts about whether the EU leaders will reach agreement on a 750-billion-euro pandemic recovery fund at this week's summit, amid resistance from more frugal member states.
That said, German Chancellor Angela Merkel, who now holds the presidency of the EU Council, was in no doubt of the need of the fund and the importance of its size.
"Because the task is enormous, the answer must also be huge," she said Monday, after hosting Italian Prime Minister Giuseppe Conte for talks.
"It must be particularly powerful in order to signal clearly that Europe wants to hold together in this difficult time. There is a political dimension to it".
Any potential progress on the recovery fund at the EU summit “should translate into support for EUR/USD for the remainder of the week, with the ECB meeting playing second fiddle,” ING added.
By Saikat Chatterjee LONDON (Reuters) - The Aussie and the Canadian dollar climbed on Tuesday on firmer oil prices while the euro held below $1.06 as European Central Bank (ECB)...
By Zhang Mengying Investing.com – The dollar was up on Tuesday morning in Asia despite worries about economic recession. Investors await a speech from the European Central Bank...
By Hannah Lang WASHINGTON (Reuters) - The U.S. dollar struggled versus its major rivals on Monday as softening inflation expectations prompted a reassessment of the prospects for...
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
I feel that this comment is:
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.