Euro And European Shares Recover as German Political Situation Eased
US dollar and Japanese yen are trading lower today, as risk aversion eased on the markets. Australian dollar is trading as the strongest one for today, followed by New Zealand dollar, Sterling and then Canadian dollar. Euro strengthens as political tension in Germany reduced.
German DAX index leads European stocks higher and is trading up 1.43%, CAC is up 1.03% while FTSE is up 0.77%. Sentiments are lifted by news that Chancellor Angela Merkel made a last minute deal with the rebellious Interior Minister Horst Seehofer in immigration. Today’s data showed, that Eurozone PPI increased by 0.8% mom, 3.0% yoy in May. Retail sales rose 0.0% in May.
The British pound rose, with the GBP/USD pair breaking an important mark of $1.3200 after the June index of business activity in the construction sector of the UK rose at the fastest pace in seven months. UK PMI construction rose to 53.1 in June, up from 52.5 and beat expectation of 52.0.
It is reported, that China will keep the national currency stable at an equilibrium level, and the central bank will maintain a prudent, neutral policy stance. Yi Gang (the People’s Bank of China Governor) stated, that the central bank will "keep the yuan exchange rate basically stable at reasonable and balanced level."
The Reserve Bank of Australia left the cash rate unchanged at 1.50% for a 21st meeting in July. The RBA has for the first time in two years dumped warnings about the strong dollar but raised its alert level on rising wholesale bank funding pressures that could retard its ability to hike the official cash rate as a buffer against the next downturn.