The euro (EUR) finally rose up against the U.S. dollar (USD) after surging to close up 2.2% higher against the greenback. This marked the euro’s best performance against the greenback since the 18th of May 2015.
This boost in the single currency came after the release of consumer price inflation which showed a hike in the euro zone inflation for the first time in 6 months. The hike was also prompted by fresh reports that Greek creditors have finally finalized a proposal they will present to the government which will hopefully resolve Greece’s debt crisis with the IMF (International Monetary Fund).
Global FX strategist at Crédit Agricole, Mark McCormick, said that the greenback’s gains over the past fortnight and continued market optimism on Greece has strongly contributed to the sudden positive performance by the euro.
McCormick further went on to comment that investors are likely to take profit before the ADP releases their numbers on employment on Wednesday. Added to this, with a positive tone coming out of Greece’s negotiations with its lenders, the euro has been given the opportunity to push higher against the USD.
The ADP is an important report which provides traders with a clear indication of the nonfarm payrolls number of the Labor Department. According to analysts, the Labor Department is expected to report that 210,000 jobs were created in May.
In currency trading on Tuesday, the euro (EURUSD, -0.1614%) rose to $1.1164 after previously trading at $1.0932 on Monday.
Interestingly, at one instance during the trading day, the euro reached the $1.12 mark against the dollar.
The improved performance by the euro came moments after reports that the IMF and Greece had reached a consensus on a deal that is expected to release bailout funding for Greece. Apart from these reports, the positive consumer price inflation data in the euro zone also contributed to the surge. According to reports, core inflation rose from 0.6% in April to 0.9% in May.
Elsewhere, the dollar (USDJPY, -0.21%) briefly broke above the ¥125.07 mark in morning trade, marking its highest level since the end of 2002, before later falling to trade at ¥124.06. The greenback finally traded at around ¥124.80 late on Monday.
Meanwhile, the British pound (GBPUSD, +0.1564%) surged to $1.5345 on Tuesday from $1.5201 posted on Monday. Also, the ICE U.S. Dollar Index (DXY, -0.24%) dropped 1.6% to 95.8150.
MT4 Chart: EUR/USD
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