EUR/USD Remains Steady After Hitting 3-Month High on Monday
Euro remains firm versus major currencies today. The EUR/USD pair gained 0.07% to trade at 1.1755. However, the 1.18 level remains a major stumbling block for euro/dollar, after the pair retreated after reaching 1.1815 yesterday. Over the last 10 days, the euro has risen 2.5% versus the greenback, boosted by solid Eurozone economic data.
Yesterday, the single currency rose to more than a three-month high against the dollar, after European Central Bank President Mario Draghi said he sees a vigorous pickup in Eurozone inflation, backing moves toward unwinding an ECB asset purchase program meant to stimulate the economy.
The Italy ruling coalition lowered the terms for its debt to GDP ratio. Previously, Deputy PM Di Maio had suggested the debt to GDP ratio would be about 2.8% but recently the target had been scaled back to 1.9%. The news caused the Italy/Germany 10-year bond spreads to narrow to 238 bps from 245 bps yesterday. German 10-year bund yields continue to tick higher, with the yield at 0.53%, the highest since May 22.