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Forex - Euro holding steady against dollar

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Investing.com -

Investing.com - The euro was steady against the dollar on Tuesday, after retreating in the previous session as investors continued to digest the European Central Bank's latest steps to tackle low inflation and shore up the recovery in the euro area.

EUR/USD was at 1.3596, still some way from the four-month trough of 1.3502 reached last Thursday. The single currency lost 0.4% against the dollar on Monday.

The pair was likely to find support at 1.3550 and resistance at 1.3667, Monday's high.

The euro weakened broadly on Monday as euro zone bond rallied, highlighting the diverging monetary policy stance between the European Central Bank and the Federal Reserve.

Borrowing costs in the peripheral euro zone fell to fresh record lows on Monday, widening the yields between some euro area government bonds and U.S. Treasuries.

The ECB on Thursday cut the main refinancing rate in the euro area to a record low 0.15% and imposed negative deposit rates on commercial lenders, in a bid to stimulate lending to businesses. ECB President Mario Draghi also kept the option of quantitative easing on the table.

The euro was lower against the yen, with EUR/JPY down 0.21% to 139.08, and was flat against the pound, with EUR/GBP at 0.8087, not far from the one-and-a-half year low of 0.8063 reached late last week.

Elsewhere Tuesday, the dollar was lower against the yen, with USD/JPY down 0.24% to 102.28 from 102.51 on Monday.

Official data on Tuesday showed that the annual rate of consumer price inflation in China ticked up to a four-month high of 2.5% in May while producer price inflation slowed, easing concerns over the risk of deflation in the world's second-largest economy.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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