The euro gained against the majority of its most-traded counterparts on speculation Greece’s parliament will approve an austerity package needed to ensure more financial aid and stave off the currency union’s first sovereign default.
The shared currency erased losses versus the dollar after European Central Bank President Jean-Claude Trichet said policy makers are in “strong vigilance mode,” signaling they intend to raise interest rates next week. The dollar fell against most of its major peers as stocks and commodities rose.
“Most people expect a yes vote,” said Steven Englander, head of Group-of-10 currency strategy at Citigroup Inc. in New York. “The market has fully priced in an ECB hike, pretty much priced in a yes vote.”
The greenback extended its losses after a report showed confidence among U.S. consumers unexpectedly fell in June to a seven-month low.
The Standard & Poor’s 500 Index rose 1 percent. The Thomson Reuters/Jefferies CRB Index of raw materials increased for the first time in five days, climbing 1.2 percent.
The euro rose after Trichet’s comments at a press conference in Amsterdam. The ECB raised its benchmark rate in April for the first time in almost three years, lifting it by a quarter point to 1.25 percent.
“The ECB is moving ahead with tightening and trying to be as independent as it possibly can,” said Stephen Gallo, head of market analysis at Schneider Foreign Exchange in London. “It’s trying to show the markets that it’s trying to stay out of the situation and put as much burden on as they can on the politicians.”
Greek lawmakers vote tomorrow on the austerity package and vote the next day on a measure implementing it.
|remaining time till the new event being published|
All posted material is a marketing communication solely for informational purposes and reliance on this may lead to loss. Past performance is not a reliable indicator of future results. Please read our full disclaimer.