Euro drops slightly as traders gauged the outcome of a debt in Germany around major fiscal reforms, although the currency hovered around multi-month highs against the U.S. dollar.
By 10:12 ET (14:12 GMT), the euro had dropped against the greenback by 0.3% to $1.0860, but stayed near a five-month peak touched earlier this week. Sterling inched down on the dollar to $1.2946.
Lawmakers in Germany are considering a proposed 500 billion euro fund for defense and infrastructure spending, as well as a loosening to the country's traditionally strict borrowing rules. The plans have been put forward by the parties who are widely tipped to form the next coalition government in Europe's largest economy.
"A couple of days ago, the Green party said it expected a deal with Chancellor-to-be Friedrich Merz by the end of the week," analysts at ING said in a note to clients. "Once that is announced, we could see a tick higher in the euro, although markets are already almost fully pricing it in."
Elsewhere, the dollar index, which tracks the greenback against a basket of its currency peers, moved up by 0.2% to 103.82, as markets weighed the implications of a producer price reading for February that was unexpectedly unchanged on a month-on-month basis. Federal Reserve officials will likely be closely monitoring components in the numbers that factor in to its preferred gauge of inflation, especially ahead of the central bank's upcoming monetary policy gathering next week.
Ongoing international trade tensions were also in focus, particularly after U.S. President Donald Trump threatened to place 200% tariffs on alcohol imports from the European Union in response to the bloc rolling out retaliatory countermeasures against his steel and aluminum levies.
Investors were keeping tabs on the potential of a U.S. government shutdown as well after Senate Democrats said they would block a bill to avert a shuttering of the federal government.
"A stabilisation might be on the cards for now; in the coming weeks, we still see upside risks for the greenback," the analysts at ING said.
Source: Investing.com
The US dollar weakened at the start of the week after tensions between the United States and the European Union escalated over the Greenland issue. Markets assessed that the political conflict, which ...
EUR/USD loses ground for the sixth consecutive day on Wednesday, trading below 1.1730 after peaking above 1.1800 last week. The pair struggles amid a moderate US Dollar (USD) rebound following the rel...
The EUR/USD pair moved steadily around 1.1750 during Wednesday's Asian session. Its movement appeared to be holding up after a sharp drop the previous day from its highest level since September 24th. ...
The euro rebounded above $1.16, reaching its strongest level since mid-November, as investors adopted a cautious stance ahead of key Eurozone and US economic data that could influence interest rate ex...
The EUR/USD pair traded flat on Thursday, trading around 1.1596, as market liquidity thinned during the US Thanksgiving holiday. Despite the limited movement, pressure on the US dollar remained as exp...
Oil prices stabilized on Thursday (February 12th), as the market reassigned a risk premium to US-Iran tensions despite US inventory data showing swelling domestic supplies. This movement confirms one thing: geopolitical headlines are still more...
Gold prices weakened slightly on Thursday (February 12th), as more solid US employment data reduced market confidence in an imminent Federal Reserve interest rate cut. The strong employment data prompted market participants to shift expectations of...
The Hang Seng Index reversed its downward trend in Hong Kong on Thursday (February 12th), weakening by around 0.9% to around 27,000 after a strong session earlier. This decline halted the momentum of the short term rally, as investors began to...