FILE PHOTO: European Central Financial institution (ECB) presents new 50 euro banknote at financial institution headquarters in Frankfurt
LONDON (Reuters) – The euro rebounded to a greater than 3.5-month low in opposition to the US greenback on Thursday, after accommodative feedback from the Fed chief shattered a current spike in Treasury yields.
In testimony to the US Congress, Fed Chairman Jerome Powell mentioned the US financial system was “nonetheless a great distance off” from the degrees the central financial institution needed to see earlier than slicing financial help.
In opposition to the buck, the euro stabilized at $ 1.1831, recovering from a low of $ 1.1772 reached in early April earlier than Powell’s testimony within the earlier session.
“General, feedback recommend the Fed is extra more likely to wait till later this 12 months to begin phasing out quantitative easing, however has the choice of beginning earlier in September,” MUFG strategists mentioned. in a day by day word.
Exterior the euro, normal market sentiment remained subdued with the greenback remaining robust in opposition to different main currencies.
Blended financial knowledge in China – exhibiting a broadly anticipated slowdown in progress, however indicators of extra resilient home demand – didn’t enhance the temper both.
The protected haven yen appreciated broadly and final rose 0.1% to 109.86 per greenback and got here near testing multi-month peaks at 129.91 per euro. The Aussie fell to $ 0.7453, whereas the Kiwi fell beneath 70 cents to $ 0.6998. EUR /
“The market remains to be on an unsure path,” mentioned Rodrigo Catril, strategist at Nationwide Australia Financial institution.
In opposition to a big basket of currencies, the buck stabilized at 92.41 regardless of the 10-year benchmark US Treasury yields extending their decline for a second consecutive session.
The Canadian greenback additionally weakened Thursday – helped by decrease oil costs – though the Financial institution of Canada additional decreased its political help on Wednesday.
(Reporting by Saikat Chatterjee; Modifying by Hugh Lawson)