Euro Clings To Recent Gains Versus Dollar
The euro barely budged in quiet dealing Monday, holding its recent gains versus the dollar amid indications that U.S. lawmakers remain far apart a week from a deadline to raise the nation’s debt limit.
While traders remained concerned about the long-term implications of last week’s Greek bailout, the immediate focus of the markets has turned to the nasty debate between Congressional Democrats and Republicans on Capitol Hill.
The euro was steady near $1.4350 versus the buck, having touched as high as $1.4436 last week.
An absence of first-tier economic news from either side of the Atlantic is expected to keep the pair locked in a tight range for the day.
The euro also saw little movement against the resurgent yen, holding above Y112.
Careful monitoring of the currency markets is warranted, given the risks relating to the growth outlook of overseas economies, Bank of Japan Governor Masaaki Shirakawa said Monday.
Appreciation of the yen, when caused by the uncertainties about overseas economies, could have adverse effects on the economy as a whole through a decline in exports and corporate profits, the policymaker said.
The big winner today was the safe haven Swiss franc, which has rode a wave of fear to record highs. The euro dropped from near CHF 1.19 to CHF 1.1530 over the past two sessions, edging toward a recent all-time low of 1.1403. Moody’s Investors Service on Monday lowered Greece’s local and foreign-currency bond ratings to ‘Ca’ from ‘Caa1′, citing likelihood of substantial losses to private creditors on their government debt holdings.
Germany’s leading economic indicator increased further in May, signaling further expansion in economic activity in the near term, data from a survey conducted by Conference Board showed Monday.
The leading economic index (LEI) increased 0.5 percent to 110.7 in May from 110.2 in April.
