The Euro Rises in a Steady Market, While the Pound Declines

The euro has begun the week on a high note. EUR/USD is currently trading at 1.2213, up 0.32 percent in the North American session. There are no economic releases from the eurozone on Monday since it is a national holiday in most of Europe. Nonetheless, the euro is gaining strength and has entered the 1.22-zone.

Today’s markets are in a state of consolidation, with no progress. The pound is trading slightly lower, trailed by the Australian dollar and the US dollar. After a brief dip, the New Zealand Dollar has firmed slightly. The Euro and Swiss Franc have also risen in value, aided by buying against the Pound. Gold is slipping in a range underneath the 1900 mark, but it appears to be poised to increase its strong gains.

On Tuesday, the emphasis will be on German results. The prestigious Ifo Business Confidence Index for May will be published (8:00 GMT). The index has risen for three months in a row, and the trend is expected to continue. The May consensus is 98.2, up from 96.8 in the previous release.

Euro Steadies As Pound Saw Some Selling for 2nd Day in a Row

On Monday, comments from Bank of England (BoE) officials failed to elicit a significant market response. Governor Andrew Bailey of the Bank of England testified before the Treasury Select Committee that the current growth and inflation trends do not support the idea that additional monetary support is needed. “I’m pretty happy with where we’re at in terms of strategy,” Bailey said.

Deputy Governor Jon Cunliffe of the Bank of England reiterated the guidance that policy will not be tightened until there is strong proof that spare capacity is being eliminated.

During the mid-European session, the GBP/USD pair retained its offered tone and was last seen hovering near the lower end of the daily trading range, around the 1.4130-25 area. On Monday, the pair extended its retracement drop from the 1.4235 area, or three-year highs, and saw some selling for the second consecutive session.