Traders Cautious on the Euro

The euro extended declines and bonds rose as European political risk ensured an ongoing demand for havens. The dollar edged higher before the release of Fed minutes.

Europe’s currency dropped a fourth day, briefly passing 1.05 per dollar for the first time in more than six weeks as sovereign bonds across the region advanced. Germany’s DAX Index of stocks, already at an almost two-year high, crossed the 12,000 level before paring gains. Oil fell from the highest price in more than a week amid speculation about the effectiveness of OPEC’s supply curbs and forecasts for another expansion in U.S. crude stockpiles.

Investors in Europe seem increasingly divided, with French presidential elections and the U.K.’s Brexit plans driving demand for the safest debt and optimism for global economic growth and improved corporate earnings supporting stocks. Traders will next turn their focus to minutes from the U.S. Federal Reserve’s latest meeting, which may offer more clues on the path of interest rates in the world’s biggest economy.

Bloomberg

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