The single currency recovered some of the losses it incurred on Friday, gaining over half a cent against the greenback as risk appetite in the market strengthened.
- Rallying equities yesterday, which have been boosted by stronger commodity prices and optimism about the US corporate earnings season, also buoyed support for the euro, allowing it to briefly trade over 1.48.
- Analysts also noted that while in other nations future policy remains hazy, the single currency benefited from a clearer outlook for monetary policy in the eurozone.
- Additionally, comments from the president of the St Louis Federal Reserve that the US economy faced risks from rising inflation, stoked speculation that US interest rates might rise sooner than had been expected, but investors remained bold in their exposure to risk, continuing to sell the dollar.
- This morning, the pairing is trading relatively steadily around yesterday’s closing price, although the euro is likely to find support from a German economic sentiment survey, released today at 10:00BST.
- In the US, investors await figures on the Federal Budget Balance, however the exact time of the release is unknown.
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