FXStreet (Edinburgh) – In spite of today’s sharp correction lower, EUR/USD is about to close the first week with gains after two consecutive weekly pullbacks, currently navigating the 1.1120/30 band as markets are drawing to a close.
Bunds, Greece, ECB
The shared currency has managed to clinch the vicinity of 1.1400 the figure earlier in the week boosted by strong tailwinds provided by a persistent sell off in the German Bunds. The resulting higher yields fuelled the upside momentum in the euro, with the 10-year benchmark trading at shouting distance from the critical 1.0% threshold.
Adding to the EUR rally, what initially was an ‘almost done’ deal between Greece and its EU creditors later morphed into another round of empty promises, rumours and the like from both negotiating teams, eventually arriving at the same outcome as the last weeks: nothing. Greek officials have managed to bypass today’s IMF repayment, requesting instead to bundle up June’s repayments in one payment at the end of the month. Something different, at least, from the usual string of meetings, comments, promises and else.
Nothing really new from the ECB and the subsequent press conference by M.Draghi, albeit markets have perceived the steady stance as positive and attempted a bull run that ultimately probed to be ephemeral.
Payrolls and a Fed’s hike in 2015
The US labour market once again gave strong signals of a continuous improvement, as seen by better-than-expected figures from the ADP report on Wednesday, Initial Claims on Thursday and ending today with the US economy adding 280K jobs during May, crushing estimates at 225K.
The results leave the door open for the Fed returning to a normalization of its monetary policy via rate hikes this year, perception that was accentuated by New York Fed President W.Dudley, stating that a rate hike is possible this year.
(Market News Provided by FXstreet)