Euro Steady as Fed Easing Bets Offset Euro Woes
The euro was steady against the dollar on Tuesday as prospects of weakness in the U.S. economy leading to further monetary easing offset poor euro zone data and doubts about a European plan to support indebted countries.
Medioimages | Photodisc | Getty Images
Analysts and traders said the euro could make some gains as investors trim bearish positions built in the run-up to last week's European summit, though a likely rate cut by the European Central Bank would limit gains.
Data showing U.S. manufacturing activity contracted for the first time in nearly three years increased the chance of more easing by the Federal Reserve, which is likely to weigh on the dollar and bolster growth-linked currencies.
But signs out of the euro zone were also discouraging, keeping sentiment towards the euro bearish. The jobless rate rose to a record in May and factory activity contracted again in June.
The euro [EUR=X 1.2572 -0.0009 (-0.07%) ] was steady at $1.2583, below a peak of $1.2693 hit on Friday in the wake of the summit agreement but comfortably above last week's trough of $1.2405. Traders cited a large option expiry at $1.26.
"There are a lot of implementation risks but for now the market seems to be buying what came out of the EU summit. Before we go back to a trend of selling the euro we may have a bit of consolidation and perhaps some short covering," said Carl Hammer, chief currency strategist at SEB.
CC:Read More From Source
Related ArticlesIdeas to Stay Healthy using the Healthy Cooking Appliances
May 20, 2013, 2013 04:53:02 AM
Barring a huge surprise, the continent's four biggest leagues will be won by the usual suspects in 2012-13, as the gulf grows between the established elite and their challengers
Mar 28, 2013, 2013 05:41:54 AM
What all has happened in the world since Tiger Woods was last ranked No. 1 in the world?
Mar 28, 2013, 2013 05:41:08 AM
The Three Lions captain was disappointed to surrender the advantage against Montenegro but is adamant that his side can reel their opponents in and qualify as winners
Mar 27, 2013, 2013 05:31:46 AM
The Bleus star was disappointed with his side's 1-0 World Cup qualifying loss against Spain at the Stade de France
Mar 27, 2013, 2013 05:30:20 AM