Euro falls back from 2-1/2 month highs, yuan nears 2019 low
Monday,
10-Jun-2019
04:20 PM (IST)
The euro pulled back from 2-1/2 month highs on Monday as a U.S.-Mexico deal over migration boosted the dollar and after sources said European Central Bank policymakers were open to cutting the ECB’s policy rate should economic growth worsen. The single currency rocketed last week after the ECB did not - as some had anticipated - hint at interest rate cuts, instead saying rates would stay “at their present levels” until mid-2020. But on Sunday two sources familiar with the ECB’s policy discussions said a cut was firmly in play if the bloc’s economy was to stagnate again after expanding by 0.4% in the first quarter of the year. The euro fell 0.2% to $1.1306 after hitting $1.1348 last week, its highest since March. The dollar index gained 0.3% to 96.825. The greenback had weakened last week after poor economic data encouraged investors to scale up their bets that the Federal Reserve would soon cut interest rates. The Mexican peso surged more than 2% after the United States and Mexico struck a deal on migration to avert a trade tariff war, supporting a rebound in investor risk appetite that also knocked the safe-haven yen lower. U.S. President Donald Trump had threatened to impose 5% import tariffs on all Mexican goods starting on Monday if Mexico did not commit to do more to tighten its borders. The yen shed 0.3% to 108.65 after earlier hitting its weakest since late May, though it remains more than 3% stronger than its levels of April. Investors also sold the Swiss franc.
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