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19/06/24
195
USD Flat in Holiday-Muted Trading
On Wednesday, the US dollar battled for direction as U.S. markets were closed, resulting in muted trading.
The dollar fell overnight as U.S. retail sales indicated that economic activity was lackluster and the Federal Reserve would reduce rates sooner.
The euro was 0.1% higher at $1.0746 after on Friday hitting a 1.5-month low of $1.07.
The yield gap between German and French government debt, which is seen as a measure of the risks of a budget crisis in Europe, has since Monday eased slightly but stayed close to the 7-year highs reached last week.
Analysts believe that the single currency is far from posing any serious threat to the euro area bloc’s financial stability.
The head of global markets research at MUFG, Derek Halpenny, said the limited move in forex versus the French government bond yield spread move underlines the fact that the reaction is a reappraisal of fixed income risks.
Marine Le Pen, the leader of the National Rally (NR), said she wanted cohabitation with President Emmanuel Macron and would respect institutions. This led to expectations that NR may backtrack on pledges that were fiscally expensive if it wins the elections in July.
The U.S. dollar index, which measures its strength against 6 other major currencies was flat at 105.20.
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