Euro surges amid Bond Selloff, Greek Relief

The euro moved firmly higher against most other currencies Tuesday amid a wider selloff in the European bond market and relief that Greece made a debt payment to the International Monetary Fund.

The shared currency EURUSD, +0.7799% climbed to $1.1240, up from $1.1156 late in New York on Monday. The gain came as interest rates crept higher in the major European economies, which is usually seen as strengthening the currency. Additionally, investors were relieved that the cash-strapped Greek government made a scheduled 750-million-euro ($843 million) loan repayment to the IMF.

Meanwhile, the dollar moved firmly lower against most other big competitors, with the ICE dollar index DXY, -0.67% losing 0.6% to 94.40. Boris Schlossberg, managing director of FX strategy at BK Asset Management, said the dollar weakness came as New York Fed President William Dudley said Tuesday that he doesn’t know when the first interest-rate hike will occur, casting doubt on the idea the Fed will start tightening in September.

“Dudley’s comments indicate a sense of reluctance on the part of FOMC members to normalize monetary policy at a time of uncertainty and slowdown in the global economy,” Schlossberg said in a note.

Elsewhere, the yen USDJPY, -0.05% rose, and the dollar bought ¥119.99, down from ¥120.08 on Monday.

The pound GBPUSD, +0.4362% climbed to $1.5687 from $1.5588, extending gains seen after the Conservative Party unexpectedly won a majority in Thursday’s U.K. general election.

Source: MarketWatch