While the Euro remained locked in a bearish relationship with its British currency rival over the weekend, the common currency was able to advance on its US peer as the tension surrounding Federal Reserve easing mounted.
As former Treasury Secretary Lawrence Summers dropped from the list of contenders for the role of Governor of the Federal Reserve, the odds of the Federal Reserve tapering stimulus sooner rather than later dipped and the ‘Greenback’ broadly declined.
The Euro/US Dollar pairing is currently trading in the region of 1.3367
With current Governor Ben Bernanke due to step down from the position in January and easing speculation rife, who will take over the reins has become a hot topic. Summers had the backing of President Barack Obama, so his withdrawing from the race has been something of a surprise.
Market strategist Imre Speizer said this of the development; ‘News that Summers had withdrawn from consideration for the Fed post has surprised the market as he had been widely tipped to take over from Bernanke. Given that he was also perceived to be less QE-friendly than Yellen, the other main contender, the US Dollar has fallen.’
The Euro consequently managed to achieve a two week high against the US Dollar.
With the Eurozone’s consumer price index scheduled for publication at 10:00 GMT additional Euro movement can be expected during the European session. Economists are forecasting that CPI came in at 1.3 per cent in August, year-on-year.
While the Federal Open Market Committee’s meeting on Wednesday is likely be the week’s main catalyst for market movement the Euro could also experience fluctuations as a result of tomorrow’s German ZEW economic sentiment survey and Friday’s Eurozone consumer confidence report.
Euro (EUR) Exchange Rates
As of 09:00
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3367 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8382 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4296 <
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6298 <
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.3748 <