On Monday, the single currency Euro rallied to new highs due to the release of the upbeat German data that boosted investor confidence and decreased the ongoing political concerns of the market regarding the European economy.
Current German Chancellor Angela Merkel also made comments regarding the positive political developments in the country. During the previous week, the markets raised their concerns on the possibility of Merkel not being able to sustain another term due to the failure of the talks between the Greens political party and pro-business Free- Democrats.
The upbeat data helped eased these concerns regarding Germany’s political instability upon the agreement of the Leaders Merkel’s conservative party on a grand coalition being pursued with the SPD.
Euro Vs Other Currencies
The euro was up against the U.S. dollar to a two-month high by the beginning of the week to a new high of $1.1946 following the release of an upbeat German sentiment data. The currency also gained against other major currencies on Monday.
Against the Japanese yen, the common currency is now at 133.24 yen which is its highest rally since November 16 while the Euro was mostly steady against the British pound to 0.8978 close to its monthly high of 0.9014.
The New Zealand dollar also hit a new low against the euro which is its lowest close in the past week on signs of the recovering German economy. During Monday’s trading session, the kiwi was down against the euro by 57.58 cents from previously trading at 57.66 on Friday in Europe.
The U.S. dollar index traded close to its two-month low of 92.675 at 92.801 mostly trading flat from Friday’s intra-day low. The greenback remained mostly downbeat largely influenced by the ongoing market sentiment regarding the interest rate hike from the U.S. Federal Reserve.
The gains that the euro recorded on Monday resulted in a selloff in most Chinese shares as investors took advantage of the profits from long positions placed during the past couple of week.
Most investors have started selling most Chinese bond yields in the midst of a growing market concern in China regarding the actions of its government in cutting down the financial risks. Asian shares continued to slide at the beginning of the week as the markets awaited major data released from the United States as well as China.
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