The euro rose against the dollar, ending two weeks of losses as investors awaited market data that points towards monetary easing in the euro zone.
The euro advanced 0.1 percent to $1.3702, ending a run of losses of more than 1 percent over the last two weeks. The shared currency advanced to 138.99 yen before edging lower to 138.77 yen, a three-month low.
The euro has been hurt by speculation that the European Central Bank may ease its monetary policy when it meets in June. Commodity Futures Trading Commission’s data that was released last Friday indicated that there were 2,175 net short contracts on the common currency in the week ended May 13, down from net long positions of 32,551 a week earlier, reported Reuters.
“There seems to be so many reasons to short the euro,” said Bart Wakabayashi, a Tokyo-based head of forex at State Street Global Markets. “The ECB seems to be the one [central bank] under the most pressure to act the soonest.”
The ECB is expected to roll out a raft of measures such as a reduction in all interest rates and policy that seeks to increase lending to small and mid-sized enterprises. Hence traders will be keenly monitoring purchasing managers’ surveys of the euro zone that will be released this week.
“Given the low euro zone inflation, interest will be on the input/output price subcomponents of the PMIs,” analysts at Commonwealth Bank told clients.
The dollar index fell to 80.017, down from last week’s peak of 80.338 that it touched on Thursday. The dollar fell 0.1 percent to 101.44 yen, which is close to 101.31 yen, a two-month low that it also hit last Thursday. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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