The euro gains on Monday after registering its biggest weekly drop in nearly two months. Risk appetite gradually returned to global markets after a week of turmoil.
Markets seem to be recovering after last week’s selloff. Bond yield curves inverted, signalling the global economy was headed towards a recession. However, investors were still wary about the near-term outlook for the single currency.
Against the greenback, the euro rose 0.2% to $1.1114 in London trading after falling 1% last week. Last week’s fall was its biggest weekly drop since early July.
With hopes of fiscal stimulus from Germany growing and steps by China over the weekend to cut corporate lending costs pushing up equities, growth-sensitive currencies such as the Australian dollar also edged higher.
But despite the gains, the perceived safe-haven currencies such as the Japanese yen and the Swiss franc remained firmly in demand. Sight deposits at the Swiss National Bank registered another big weekly rise, indicating more intervention from policymakers.
Investor optimism is also likely to be capped before a speech by U.S. Federal Reserve Chairman Jerome Powell later this week. Experts believe his comments will be aimed at reassuring nervous markets that the Fed will remain in an easing stance.
START TRADINGForex – Euro gains after a week of turmoil
The dollar index was broadly steady at 98.20, close to a two-week high of 98.339 reached on Friday.
Against the yen, the dollar was little changed at 106.57 yen, near a one-week high of 106.98 yen.
Sterling fell back from a near three-week high against the euro on Monday. Sentiment towards the pound was better than in recent sessions. Investors hoped Britain and the European Union would make some progress in Brexit talks. The pound last week had its strongest run in two months, helped by investors cutting their bets against the currency. The pound weakened by as much as 0.3% against the euro to 91.60 pence. Versus the dollar, the currency edged 0.2% down to $1.2123.
In commodities, oil prices rose on Monday following a weekend attack on a Saudi oil facility by Yemen’s Houthi forces. Also, traders looked for signs of progress in U.S.-China trade negotiations. Brent crude was up 85 cents, or about 1.4%, at $59.49 a barrel at 1225 GMT. WTI crude futures were up $1.01, or 1.8%, at $55.88 a barrel.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money