Euro settles in above 1.1800 in APAC

SINGAPORE, Aug 1 (Reuters) – The dollar inched up from a 2-1/2 year low versus the euro on Tuesday, but its outlook remained clouded by U.S. political turmoil and doubts about whether there will be another Federal Reserve rate hike this year.

The greenback had slipped on Monday, pressured by month-end portfolio adjustments, while the euro was supported by expectations for a more hawkish monetary policy stance from the European Central Bank.

Uncertainty on the U.S. political front was also seen weighing on the currency, after President Donald Trump ousted recently hired White House communications chief Anthony Scaramucci on Monday.

The euro edged down 0.1 percent to $1.1828, pulling back from a peak of $1.1846 touched in early Asian trade on Tuesday, its strongest level since January 2015.

While expectations for the euro to head higher are likely to remain intact, the common currency might take a breather against the dollar as investors look to U.S. economic data this week for fresh impetus, said Stephen Innes, head of trading in Asia-Pacific for OANDA in Singapore.

Traders might trim some long positions in the euro for now and wait for opportunities to buy the euro again on dips, he said.

“I don’t think they are going to change their overall bias that the euro is going to be higher, but…if this really was month-end move driven, we should see a little bit of a retracement,” Innes said, referring to the euro’s 0.8 percent rise on Monday.

Reuters

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Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes
Stephen Innes

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