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EUR/USD falls slightly as Fed rate hike, Greek concerns remain in focus

Published 08/03/2015, 05:00 PM
Updated 08/03/2015, 05:04 PM
EUR/USD fell by 0.25% on Monday to settle at 1.0956
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Investing.com -- EUR/USD fell mildly on Monday extending minor losses from the previous session, as the timing of a highly-anticipated interest rate hike by the Federal Reserve and concerns related to the Greek Debt Crisis remained in focus.

The currency pair traded in a tight range between 1.0941 and 1.0996 during Monday's session before settling at 1.0956, down 0.0028 or 0.25%. The euro closed lower against its American counterpart for the fifth time in six sessions. Since surging more than 1% against the dollar on July 21, however, the fluctuations in the pair have been moderate. Over the last 10 sessions, EUR/USD has closed in between a range of 1.093 and 1.106.

The pair likely gained support at 1.0808 the low from July 20 and was met with resistance at 1.1131, the high from July 27.

On Monday morning, the U.S. Department of Commerce's Bureau of Economic Analysis said consumer spending increased by 0.2% in June in line with analysts expectations, while personal income rose by 0.4% -- slightly higher than consensus estimates. Analysts forecasted a 0.3% rise in incomes for the month.

More critically the Core PCE Index, which strips out food and energy prices, inched up 0.3% for the month, up from a 0.2% increase for May. On a year-over-year basis, however, the gains were muted as the index only increased by 1.3%.

At its July FOMC meeting last week, the Fed reiterated that inflation remains below its targeted goal of 2% over the medium term, commonly defined as a period of the next one to two years. The reading will likely bolster dovish viewpoints on the Fed for a delayed interest rate hike beyond this fall.

Separately, Gallup said in its monthly U.S. Consumer Spending Measure that self-reports from American consumers on a monthly basis averaged approximately $91 for July, up one dollar from its level in June. While the figure is slightly lower than its level from July, 2014, it is also higher than any other reading for the month since 2009. Over the last several months, consumer spending has remained relatively flat, according to Gallup's measure.

In Greece, the Athens Stock Exchange took as much as a 30% nosedive before closing down 23% in its first session to reopen since closing five weeks ago during the height of the Greek Debt Crisis. Last week, Greek government officials met with a troika of creditors from the European Commission, European Central Bank and International Monetary Fund in the initial round of new talks aimed at completing a three-year, €86 bailout.

The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, reached an intraday high of 97.69 before paring some of the gains after the release of the data. The index closed the session at 97.60, up 0.15%.

Elsewhere, USD/CAD rose 0.26% to hit a fresh 11-year high at 1.3176.

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