Euro Rises On Yellen's Remarks, Upbeat Eurozone Economic Sentiment Index
May 30 2016 - 2:11AM
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The euro gained ground against its major rivals in European
trading on Monday, as investor sentiment rose following the Fed
Chair Janet Yellen's remarks hinting at the likelihood of a sooner
U.S. rate hike and as data showed that Eurozone economic confidence
rose to a four-month high in May.
Survey results from the European Commission showed that Eurozone
economic sentiment index improved more-than-expected to 104.7 from
a revised score of 104.0 in the prior month. This was the highest
score since January. The expected reading was 104.4.
The industrial sentiment indicator held steady at -3.6 in May,
in line with expectations.
The consumer confidence index came in at -7.0 versus -9.3 a
month ago. The score matched the flash estimate.
During a speech at Harvard University on Friday, Yellen said she
expects the economy to continue to improve and said it may be
appropriate for the Fed to raise rates in the coming months. "I
think for the Fed to gradually and cautiously increase our
overnight interest over time and probably in the coming months,
such a move would be appropriate," Yellen said.
The currency was trading mixed in the Asian session. While the
euro fell against the greenback and the pound, it advanced against
the yen. Against the franc, the euro held steady.
The single currency strengthened to a 10-day high of 123.90
against the yen and a 4-day high of 1.6655 against the kiwi, off
its previous lows of 122.66 and 1.6570, respectively. The next
possible resistance for the euro may be seen around 125.00 against
the yen and 1.68 against the kiwi.
The euro advanced to 1.4557 against the loonie, 0.7632 versus
the pound and 1.1138 versus the greenback, from its early low of
1.4472, 4-day low of 0.7589 and a 2-1/2-month low of 1.1098,
respectively. If the euro rises further, it may locate resistance
around 1.48 against the loonie, 0.78 against the pound and 1.13
against the greenback.
On the flip side, the euro pared gains against the franc, with
the pair trading at 1.1055. This may be compared to an early high
of 1.1071.
Survey data from the KOF Swiss Economic Institute showed that a
measure of the Swiss economic climate rose slightly in May to its
highest level in a year, signaling on-going development in the
economy.
The KOF Economic Barometer climbed to 102.9 from 102.6 in April,
which was revised from 102.7. Economists had forecast a score of
102.8.
Looking ahead, German flash CPI data for May, Canada industrial
products and raw materials price indexes for April are slated for
release in the New York session.
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