Forex – Euro Calm After Spain Poll; Trump Hits Petrocurrencies

© Reuters. — Major currencies were little changed in early trading in Europe Monday, although a positive tone in equity markets in the wake of the U.S. GDP report on Friday helped the and to strengthen a little against the dollar.

There was no obvious impact on the euro from the general election in Spain, which was won by the center-left PSOE party, as predicted by opinion polls ahead of the vote. PSOE leader Pedro Sanchez won’t be able to form a majority government with Podemos, the more radical of Spain’s two left-wing parties, which makes it less likely that Spain will now draft budgets with excessive deficits and further destabilize the fiscal consensus in the euro zone.

At 03:00 AM ET (0700 GMT), the was at $1.1161, only fractionally above the two-year low that it fell to last week. It’s being supported by profit-taking in on the back of Twitter comments from President Donald Trump at the weekend. Trump said he “spoke to Saudi Arabia and others about increasing oil flow.” Lower oil prices typically benefit the euro zone, an oil importer. The flip side is that petrocurrencies like the Russian suffer. It’s down around 1.5% from last week’s high.

The , which measures the greenback against a basket of six major currencies, was at 97.708, around 0.3% below the new high for 2019 that it hit on Thursday.

The euro may react later to Eurozone data. Private-sector credit growth is expected to have stayed at 3.3% in March, unchanged from February.

has opened the week in wait-and-see mode ahead of a speech by Bank of England Governor at 04:00 AM ET (0800 GMT). The pound is again at the mercy of the Brexit process, with the Labour Party set to decide on Tuesday whether or not to commit to a second referendum in its manifesto for the European Parliament elections in May. There is also the risk that local elections on Thursday will galvanize party colleagues of Prime Minister Theresa May to force her out if, as expected, the Conservatives fare badly.

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