Easing of concerns allows EUR/USD to rise

The euro was able to eke out some small gains this morning against the dollar, as worries about Greece and Portugal receded.

Last week it seemed as if we were about to endure a repeat of summers past, as yet another argument between Greece and the troika got underway while Portugal’s government teetered on the brink of collapse.

Now, those fears have eased. The Greek government is still divided on the latest round of spending cuts, but it seems that last-minute talks are likely to produce a resolution. We are now in the fourth year of the crisis, and Greece is still unable to survive without outside assistance. The weekend’s news is a painful reminder for any that thought the eurozone crisis was over.

Meanwhile in Portugal it seems that prime minister Pedro Passos Coelho has managed to put together a deal that will keep his government intact. Lisbon's ten-year bond yields have edged up this morning, but they remain well below the highs seen last week when an 8% yield for them seemed possible. Nonetheless, yields above 7% are unsustainable in the long-term for Portugal so they will be hoping market sentiment calms down in the coming week.

The EUR/USD currency cross has managed to hold above the lows seen in late May, when the $1.2800 was breached for a short time. However, this time round the line has held, suggesting that the combination of eurozone jitters and dollar strength has run its course for now. With risk sentiment on the rise across markets this morning the $1.2900 area might come back into focus in the coming days.

Spot FX EUR/USD chart

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.