Meanwhile, ECB official François Villeroy de Galhau said the central bank’s intended instrument against financial fragmentation should allow it to back its commitment to defend the euro.
The ECB’s communication efforts are having the desired effect on eurozone bond markets, which in turn is supporting the euro, according to Simon Harvey, Head of Currency Research at Monex Europe.
The euro was also supported by a stronger appetite for risky assets in the markets, with US stock futures up nearly 2% and most European equity indices higher.
Elsewhere, the yen fell more than 0.5% to a 24-year low of 135.835 per dollar, and continued to weaken after the Bank of Japan on Friday dismissed any expectations of a change in policy and renewed its commitment. with ultra-expansive monetary policy.
The dollar index, which measures the performance of the greenback against a basket of six currencies, including the euro and the yen, fell 0.2% to 104.23, with an eye on the testimony of the president of the Reserve Federal Jerome Powell before Congress beginning Wednesday.
“The next big contribution from the dollar will be when Fed Chairman Jerome Powell gives his semi-annual testimony on monetary policy to the Senate, which judging by the last FOMC meeting should be pretty rosy and means that any drop in the dollar today it is likely to be limited,” ING analysts said in a note.
Two other Fed policymakers will make public statements later on Tuesday, with traders watching their comments closely for clues on the path of interest rates.
Sterling was up 0.4% at $1.2294 ahead of Wednesday’s inflation figures and after Bank of England chief economist Huw Pill said interest rates will have to rise. more in the near future to deal with inflation.
The largest cryptocurrency, Bitcoin, rose 3.5% to $1,274 as it continues its recovery from an 18-month low of $17,592 hit over the weekend.
Source: Ambito
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