EUR/USD holds its ground above $1.38

Yesterday’s European data helped ease the EUR/USD rate back above the $1.3800 level.

Currency markets are still trying to assess how accidental or intentional Janet Yellen’s comments were, regarding the possibility the US could begin raising interest rates in the next six months. With New Zealand having already increased its interest rates, the US would not be the first as the psychological barrier has already been broken. Considering the US is still buying $55 billion on a monthly basis as part of its debt-purchasing scheme, this would be an ambitious timetable.

Europe for its part is still assessing the surprise that German manufacturing and servicing figures missed their target. This is in contrast to France beating expectations, moving out of contraction and into growth for only the second time in the last two years.

As Chris Weston pointed out last week, the EUR/USD bounce off the $1.3750 area has, in the short-term, pointed towards the currency cross heading upwards towards higher levels.

Spot FX EUR/USD chart

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