You are here


Euro stuck near US$1.19 after weaker German growth


THE euro remained stuck near four-month lows on Tuesday after weaker-than-expected economic growth in Germany and a rise in US Treasury yields helped the US dollar recover following a pause in its rally.

The US dollar's strength also helped it gain to within a whisker of hitting a 3-1/2 month high versus the Japanese yen while major currencies elsewhere traded within tight ranges ahead of US retail sales.

The greenback's rally, which has seen the US dollar claw back most of its 2018 losses after a reassessment of the path of US monetary policy versus other countries, came to a halt last week following disappointing US inflation numbers.

Euro bulls were also given a boost on Monday after European Central Bank policymaker Francois Villeroy de Galhau said that the ECB could give fresh guidance on the timing of its first rate hike as the end of its exceptional bond purchases approaches.

German economic growth slowed slightly more than expected in the first quarter of the year due to weak trade but analysts called it a blip and predicted Europe's biggest economy would shift into a higher gear again.

The euro slipped 0.1 per cent to US$1.1919, but remained below Monday's high of US$1.1996, which was the common currency's highest level since May 3. The US dollar's index rose 0.2 per cent to 92.764, pulling up from 92.243 on Monday, which was its lowest level since May 2. The benchmark 10-year US Treasury yield increased two basis points to about 3.019 per cent, after rising two basis points on Monday, helping support the greenback.

The benchmark yield was supported by signs of an easing in trade tensions between the United States and China after US President Donald Trump pledged to help Chinese telecoms firm ZTE Corp, which has been penalised for violating US sanctions with Iran.

The Norwegian crown rose 0.3 per cent versus the euro to 9.56 crowns after strong quarterly economic data raised expectations of a rate rise later this year. It later gave up most of those gains.

The ailing Turkish lira fell to a fresh record low of 4.3990 against the US dollar, bringing its losses this year to more than 13 per cent after President Tayyip Erdogan said he plans to take greater control of the economy.

Argentina's peso plunged to a new record low despite hefty central bank interventions in the past few days and policy-makers jacking rates higher in an attempt to stop the peso's slide. REUTERS

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to