LONDON (Reuters) – The euro hopped to a one-week high on Tuesday as investors added positions on hawkish overnight comments by a policymaker that reaffirmed bets the euro zone economy’s outlook remains robust.
The currency’s rise this year has lost some momentum in recent days as political concerns – notably Spain’s Catalan crisis – have grown pushing the euro down against the dollar more than 3 percent over the last month.
But on Tuesday, it bounced nearly 0.4 percent to $1.1789, its highest since Oct. 2, after overnight comments from Sabine Lautenschlaeger, a member of the European Central Bank executive board, calling for the ECB to roll back asset purchases in 2018.
“Her hawkish comments also appear supportive for the euro but the political overhang has taken the air out of the euro balloon, and this ongoing political uncertainty will most certainly cap any near-term rallies,” said Stephen Innes, head of Asia-Pacific trading at OANDA.
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