The euro gained ground against its major rivals in European morning deals on Monday, after data showed that German business confidence index improved in July, bolstering hopes that growth in the Europe’s largest economy is gathering momentum.
Data from the Munich-based Ifo Institute showed that business climate index rose to 108 in July, well above the 107.5 score economists had forecast. In June, the reading dropped to a four-month low of 107.4.
The current conditions index of the survey climbed to 113.9, defying expectations for a marginal drop to 113. In June, the score eased to 113.1, which was the first fall in four months.
With the Federal Reserve kicking off its 2-day meeting tomorrow, investors await more clues about the timing of lifting interest rates. Traders are waiting to see whether Fed Chair Janet Yellen will attempt to guide market expectations towards the possibility of a September rate hike.
Greece is due to start talks regarding the finalization of its third bailout program worth EUR 85 billion with its European creditors on Tuesday. The talks were stalled due to technical difficulties and both sides are working on a way for upcoming talks in order to clinch a deal.
The euro showed mixed performance against its major rivals in the Asian session. While the euro rose against the pound and the greenback, it held steady against the franc and the yen.
The euro spiked up to 1.0602 against the Swiss franc, a level unseen since March 19. This is a 0.4 percent increase from last week’s closing value of 1.0564. On the upside, the euro may possibly locate resistance around the 1.08 area.
The 19-nation currency appreciated by 1.2 percent to 1.1112 against the U.S. dollar, its strongest since July 13. The pair closed last week’s trading at 1.0976. Further gains may lead the euro to a resistance around the 1.124 zone.
The single currency spiked up to a 2-week high of 0.7159 against the pound, compared to Friday’s closing value of 0.7071. The euro is seen finding resistance around the 0.725 mark.
The euro that ended last week’s trading at 135.83 against the yen strengthened to a 2-week high of 136.98. The next possible resistance for the euro may be located around the 138.00 level.
Data from the Bank of Japan showed that Japan’s corporate service prices rose 0.4 percent on year in June- shy of estimates for 0.6 percent, which would have been unchanged from the May reading.
On a monthly basis, prices were flat after adding 0.1 percent in the previous month.
The euro rallied to near a 6-month high of 1.4432 against the loonie, 11-day high of 1.6806 against the kiwi and more than a 7-month high of 1.5247 against the aussie, compared to Friday’s closing values of 1.4313, 1.6680 and 1.5063,respectively. The euro is likely to find resistance around 1.45 versus the loonie, 1.70 against the kiwi and 1.53 against the aussie.
Looking ahead, U.S. durable goods orders data for June is due to be released in the New York session.
The material has been provided by InstaForex Company – www.instaforex.com