The euro extended gains!

The euro extended gains!

The euro extended gains!

The euro extended gains!

The euro extended gains to above $1.06, after ECB President Christine Lagarde said the central bank is likely to exit negative interest rates by the end of the third quarter. Traders were already boosting bets for higher borrowing costs after hawkish comments from ECB Knot and ECB Villeroy de Galhau last week.On a technical basis the first resistance on a rise is 1.0601 and first support is 1.0487 Level.

The dollar index bounced back above 102.2 on Tuesday after sliding to a near one-month low in the previous session, amid a general risk-off mood in the markets, highlighted by a decline in global equities and risk currencies. US stock futures fell early on Tuesday after social media firm Snap warned of a hit to its top and bottom-line figures amid deteriorating macroeconomic trends. Meanwhile, having peaked at a nearly two-decade high above 105 earlier this month, the dollar has been falling broadly alongside a decline in Treasury yields, with aggressive easing by the Federal Reserve already priced in. Recent weakness in US economic data and corporate earnings, coupled with positive signs for the global economy such as Shanghai’s planned reopening and US President Joe Biden’s comments this week towards a possible easing of the trade war with China, also drove investors out of the dollar.

European equity markets fell more than 1% on Tuesday, snapping a two-day winning streak as Traders remain worried over slower global growth and wonder whether Chinese measures to support the economy will be enough to offset the impact of the lockdowns. All sectors and major bourses traded in the red led by a 1.4% loss in utilities shares led losses. Meanwhile, flash S&P Global PMIs for France, Germany, and the Euro Area due early in the morning will be in the spotlight.

EUR/USD

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