The US dollar was trading firm on Monday morning hours as the euro hovered near a more than one-month low amid continued concerns about the political outlook in Europe.
The market also braced for a slew of top-tier economic data from China as investors sought clarity on how much the world’s second-largest economy is struggling to gain momentum.
The euro was nearly flat at $1.0703, picking up somewhat after falling to its lowest since May 1 at $1.06678 on Friday, Reuters reported.
The Eurozone currency also logged its biggest weekly decline since April at 0.88 percent last week.
Investors have been contemplating the risk of a budget crisis at the heart of the euro area, as far right and leftist parties gain momentum ahead of France’s surprise parliamentary election, pressuring President Emmanuel Macron’s centrist administration.
Even after the French financial markets endured a brutal sell-off late last week, European Central Bank policymakers have no plan to discuss emergency purchases of French bonds, the Reuters report said, citing unnamed sources.
Although the political turmoil is a euro-bearish story, as the euro accounts for around 57 percent of the US dollar index weighting, the fall of the euro has indirectly benefited the dollar,” said Matt Simpson, senior market analyst at City Index.
The dollar index, which measures the greenback against a basket of peer currencies, was little changed at 105.49, after touching its highest since May 2 at 105.80 on Friday.
Minneapolis Federal Reserve President Neel Kashkari on Sunday said it’s a “reasonable prediction” that the US central bank will cut interest rates once this year, waiting until December to do it.
The Fed published updated projections last week that showed the median forecast from all 19 US central bankers was for a single interest rate cut this year.
Sterling was last trading at $1.2687, up 0.04 percent on the day.
Britain’s inflation pressures still appear too hot for the Bank of England to cut rates at its June 20 meeting.
A Reuters poll published last week showed 63 of 65 economists thought a first cut would not come until Aug. 1.
The Japanese yen also struggled to gain its footing after the BOJ surprised markets when the central bank announced kept bond buying unchanged at its meeting on Friday, instead pushing details of its tapering plan to its July policy meeting.
The yen was last up 0.05 percent at 157.41 per dollar, after slipping to 158.26 after Friday’s decision, it’s lowest since April 29.
Follow us on
