Euro feels impact of European elections – Euro Currency update 

Currencies Outlook of May 27th

The Euro

The Euro is weaker against most of its rivals as the impact of last week’s European elections continues to be felt. Victory for Euro-sceptic parties weighed upon the single currency. Also piling pressure on the currency were comments made by ECB President Mario Draghi. The central bank chief said that the ECB is seeing a risk of a deflationary cycle taking hold in the Eurozone.

Pound Sterling

The Pound is trading higher against the Euro and other major peers after a report released by the Confederation of British Industry showed that confidence amongst the UK’s service companies climbed to a record high this quarter. An index of optimism leapt from 43 to 53, the highest level seen since the survey began in 1998.

US Dollar

The US Dollar climbed to its best level in three-months against the Euro yesterday after the single currency was weighed down by election results showing that anti-EU parties such as the UK’s UKIP and France’s National Front came first in their respective polls. Against other currencies the ‘Greenback’ was little moved due to light trading as a result of yesterday’s Memorial Day holiday.

Australian Dollar

The ‘Aussie’ was trading steadily against its peers after the currency was undeterred by weak consumer confidence and household financial data. Yesterday’s Bank holidays in both the US and UK led to a fairly muted session for the currency.

New Zealand Dollar

The New Zealand Dollar edged up in local trading ahead of Fonterra Cooperative Group’s milk price forecast tomorrow, which some economists expect to be cut after a steady decline in the price of dairy products sold on the exporter’s Global Dairy Trade platform.

Canadian Dollar

The Canadian Dollar saw little movement yesterday due to the closure of the US financial markets. With a lack of key data releases for most of the week the currency is likely to stay range bound. Investors will be looking ahead to Friday when the latest Canadian GDP data is released.

South African Rand

The Rand has weakened slightly against the US Dollar and is looking vulnerable ahead of economic growth data that is likely to validate the Reserve Bank’s decision to keep interest rates unchanged last week.

 

Source: eubusiness

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