Investing.com - The euro pushed higher against the U.S. dollar and the pound on Tuesday, amid cautious optimism that Greek political leaders will reach an agreement on a coalition government, but broad concerns over the crisis in the euro zone limited gains.
During European late morning trade, the euro was higher against the U.S. dollar, with EUR/USD rising 0.32% to trade at 1.2614.
Market sentiment was boosted by hopes that Greece's New Democracy party will form a coalition government with the socialist Pasok party, which would allow Athens to resume negotiations with creditors on its international bailout deal.
The yield on Spanish 10-year bonds eased back to 7.08% from a session high of 7.13%, but remained above the critical 7% threshold amid concerns that a EUR100 billion bailout agreed earlier this month may not be enough to overhaul the country’s ailing banking system.
Earlier Tuesday, Madrid saw short-term borrowing costs more than double at an auction of government bonds.
Elsewhere in the euro zone, a report showed that the ZEW index of economic sentiment in Germany tumbled to minus 16.9 in June from 10.8 the previous month, amid concerns over political instability in Greece and worries over sovereign debt contagion.
Meanwhile, market participants were looking ahead to the conclusion of the Federal Reserve’s policy meeting on Wednesday, amid speculation over the possibility of a third round of monetary stimulus from the U.S. central bank.
The single currency was also higher against the pound, with EUR/GBP up 0.30% to trade at 0.8051.
In the U.K. official data showed that consumer prices in the U.K. unexpectedly fell to 2.8% in May, the lowest level in two-and-a-half years.
The decline in inflation fuelled speculation over the possibility of more quantitative easing from the Bank of England, as until now inflation has been easing more slowly than the bank had hoped.
The shared currency was little changed against the yen and the Swiss franc, with EUR/JPY inching up 0.02% to trade at 99.52 and EUR/CHF dipping 0.01% to hit 1.2009.
The euro was broadly higher against the Canadian, Australian and New Zealand dollars, with EUR/CAD up 0.17% to hit 1.2902, EUR/AUD edging up 0.07% to hit 1.2430 and EUR/NZD slipping 0.03% to hit 1.5870.
The Australian dollar found support after the minutes of the Reserve Bank of Australia’s June meeting indicated that another rate cut was unlikely in the coming months, after the central bank surprised markets with a larger-than-expected rate cut this month.
Later in the day, the U.S. was to publish official data on building permits and housing starts. Elsewhere, leaders from the Group of 20 nations were to hold a second day of talks in Los Cabos, Mexico.
During European late morning trade, the euro was higher against the U.S. dollar, with EUR/USD rising 0.32% to trade at 1.2614.
Market sentiment was boosted by hopes that Greece's New Democracy party will form a coalition government with the socialist Pasok party, which would allow Athens to resume negotiations with creditors on its international bailout deal.
The yield on Spanish 10-year bonds eased back to 7.08% from a session high of 7.13%, but remained above the critical 7% threshold amid concerns that a EUR100 billion bailout agreed earlier this month may not be enough to overhaul the country’s ailing banking system.
Earlier Tuesday, Madrid saw short-term borrowing costs more than double at an auction of government bonds.
Elsewhere in the euro zone, a report showed that the ZEW index of economic sentiment in Germany tumbled to minus 16.9 in June from 10.8 the previous month, amid concerns over political instability in Greece and worries over sovereign debt contagion.
Meanwhile, market participants were looking ahead to the conclusion of the Federal Reserve’s policy meeting on Wednesday, amid speculation over the possibility of a third round of monetary stimulus from the U.S. central bank.
The single currency was also higher against the pound, with EUR/GBP up 0.30% to trade at 0.8051.
In the U.K. official data showed that consumer prices in the U.K. unexpectedly fell to 2.8% in May, the lowest level in two-and-a-half years.
The decline in inflation fuelled speculation over the possibility of more quantitative easing from the Bank of England, as until now inflation has been easing more slowly than the bank had hoped.
The shared currency was little changed against the yen and the Swiss franc, with EUR/JPY inching up 0.02% to trade at 99.52 and EUR/CHF dipping 0.01% to hit 1.2009.
The euro was broadly higher against the Canadian, Australian and New Zealand dollars, with EUR/CAD up 0.17% to hit 1.2902, EUR/AUD edging up 0.07% to hit 1.2430 and EUR/NZD slipping 0.03% to hit 1.5870.
The Australian dollar found support after the minutes of the Reserve Bank of Australia’s June meeting indicated that another rate cut was unlikely in the coming months, after the central bank surprised markets with a larger-than-expected rate cut this month.
Later in the day, the U.S. was to publish official data on building permits and housing starts. Elsewhere, leaders from the Group of 20 nations were to hold a second day of talks in Los Cabos, Mexico.