Euro, pound prepare for strong weekly gains

Euro, pound prepare for strong weekly gains

The euro and pound are preparing for strong weekly gains after strong economic data and taking advantage of political turmoil in the United States.

The euro climbed to a peak of 1.1172 versus the U.S. dollar, set for a 2.2 percent weekly gain after positive events and news from the euro area.

The Greek Parliament approved austerity measures demanded by creditors to release the next aid tranche worth 7.5 billion euros, amid hopes that European finance ministers will agree on the fund when they meet on Monday.

In its annual analysis, Moody’s kept Portugal’s credit rating unchanged at Ba1 with a stable outlook.

Also, a report released today showed that euro area’s current account surplus narrowed in March, yet it remained near all-time high and came above forecasts.

The pound traded higher at 1.3008 against the green currency, bracing for its fifth weekly gain out of six. Yet, the pound seems to be facing strong resistance near $1.30.

CBI data released today showed that U.K. factory orders hit the highest level since 2015 in May, adding more optimism after upbeat retail sales figures released on Thursday.

Meanwhile, there is optimism that Prime Minister Theresa May will win the June 8 Parliamentary elections, which would give her more power to discus Brexit conditions with European officials.

While stocks managed to recover slightly from the past three days hefty losses after overcoming U.S. political turmoil, the dollar could not find any ground.

The dollar index, which tracks the greenback’s movements versus a basket of major currencies, slipped to a low of 97.20, resuming its bearish direction since hitting a high of 99.76 on May 11.

Political woes started after Donald Trump’s firing to FBI Director James Comey and escalated after reports claiming Trump’s disclosure of intelligence information to Russian officials.

Ahmed Mamdouh

Ahmed Mamdouh, Co-Founder and Head of English Fundamental Analysis at FXComment.com, with 7 years of experience in the financial markets. Mamdouh holds a Master’s Degree in Economics from The American University in Cairo and a Bachelor Degree in Economics from The Faculty of Economics and Political Science, Cairo University.

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