EUR/USD Rises to Fresh Multi-Year Highs
There’s a positive air to European markets today, rebounding from 3 days of losses. Most industry sectors are higher with banks leading the gainers, as government bond yields rise.
Also the IMF has agreed to a new conditional bailout for Greece, ending two years of speculation on whether it would join in another rescue and giving the seal of approval demanded by many of the country’s euro-area creditors. It could be with as much as 1.6bln euros. The disbursement of funds is contingent on euro-zone countries providing debt relief to Greece.
Data out today in Germany and France, both coming in far stronger than anticipated. The German Ifo business sentiment indicator was expected to have fallen from 115.1 to 114.9, but not only was it 116, but that last month’s reading was revised up a tenth of a point.
Meanwhile, in France a similar story with business confidence there rising from 107 to 108, where it was forecast to have slipped a point. Additionally there was also an upward revision there too for last month’s number.
Clearly though there is a risk to the future growth of the Eurozone if the strong euro persists? Peter Dixon from Commerzbank comments on the potential effects on the euro area.
This as the Fed meets to discuss interest rates as questions are now being raised as to whether there is now any room for the Fed to raise rates again. As of the time of recording we’re waiting on the release of US consumer confidence which is expected to have fallen again, for a 4th month in a row.
--- Written by Jeremy Naylor, DailyFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.