Despite a slowdown in the euro zone economy the euro has remained in a range of $1.12 to $1.16 in 2019. The single currency held around $1.13 on Tuesday after economic surveys showed tentative signs of recovery in the euro zone economy.
However, warnings from bond markets continued to worry investors. Analysts said a stronger-than-forecast German business confidence survey on Monday was buoying the single currency. But German 10-year bund yields remained below zero and that alarmed global stock markets despite some steadying on Tuesday.
Sterling bounced 0.25% on Tuesday after two Eurosceptic lawmakers indicated they could agree to support Theresa May’s EU withdrawal deal. Lawmakers will now vote on Wednesday on a range of options, giving parliament a chance to indicate whether it can agree on a deal with closer ties to Brussels — and then try to push the government in that direction.
START TRADINGForex – Euro range of $1.12 to $1.16 in 2019
The sharp drop in the single currency, its biggest fall in two weeks, rippled over to other currencies.
The dollar recovered after global markets recoiled on Monday following an inversion in the U.S. Treasury yield curve. Such an inversion in the past has signalled a recession in the past.
With the dollar mixed across the board, risk appetite recovered, helping to lift the Australian dollar.
Meanwhile, the Swiss franc, which tends to strengthen during economic turmoil, neared a 20-month high versus the euro of 1.12. Gains by the safe-haven franc are being driven by risk aversion amid doubts about the global economy and could prompt the Swiss National Bank to intervene to weaken the currency. The franc on Monday was weaker versus the euro at 1.1234.
The pound, which had languished mostly in negative territory below $1.32, rose 0.3% to as high as $1.3251 after Rees-Mogg’ s comments. Against the euro, sterling gained 0.5% to 85.35 pence, having touched one-week highs of 85.19 pence. The pound is unlikely to rally much further, however.
Gold eased on Tuesday, after hitting one-month high in the previous session, as a slight recovery in share markets and U.S. Treasury yields reduced some of the precious metal’s safe-haven appeal.
Spot gold was down 0.3% at $1,317.46 per ounce as of 0816 GMT, after touching its highest since Feb. 28 at $1,324.33 in the previous session.
Gold prices have gained more than 3% since early March. The main reasons are a dovish Fed and concerns about a global economic slowdown.
Silver was down 0.4% at $15.48 per ounce, while platinum dipped 0.3% to $852.30 an ounce.
Sources: Reuters, Investing, CNN money
PLEASE NOTE The information above is not investment advice.