The U.S. dollar recovered on an overall positive dollar sentiment. Hawkish comments from FOMC member Powell saying that a first rate hike could come as soon as September, with a second move to follow in December, led further support to the greenback. The market is now shifting again its focus more towards the Fed and a liftoff in September, preferring to be long U.S. dollars rather than euros.
The euro remained weak even as optimism grows that Greece will avert default. Despite the the fact that a deal appeared within reach, a main reason for the decline in the euro is, that the currency became attractive as a funding currency. Eurozone finance ministers will meet again today to try to reach a final agreement to unlock aid.
The pound sterling slid below 1.58 and found a current support slightly above the 1.57-level. The up-trend is still intact. A break above 1.5835 could revive sterling’s strength whereas a significant break below 1.57 could drive the pair towards 1.5630.
The German Ifo Business Climate which is due for release today at 8:00 GMT and later the final Q1 U.S. GDP reading scheduled for release at 12:30 GMT, could be important reports to watch.
Euro-area finance minister’s talks will start today at 7 p.m. in Brussels.
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