Forex – Euro Edges Higher as Stock Market Recovery Dents Dollar

© Reuters. Euro edges higher as stock market recovery dents dollar – The euro edged higher on Monday and the dollar dipped as a higher open for U.S. stocks at the start of the week prompted investors to move away from the relative safety of the greenback.

The , which measures the greenback’s strength against a basket of six major currencies, dipped 0.10% to 90.14 by 10:12 AM ET (15:12 GMT). The index rose 1.45% last week.

In early U.S. trading, opened higher even as U.S. bond prices continued to fall.

U.S. stocks ended higher on Friday but still posted their worst week in two years as fears of faster inflation and thus more aggressive interest rate increases triggered a global stock market rout.

Investors remained cautious ahead to U.S. inflation data due on Wednesday. A stronger than expected reading could spook markets again.

edged up 0.10% to 1.2261 after earlier rising as high as 1.2297. The single currency ended last week down 1.82%, the largest weekly percentage decline since November 2016.

The dollar was still lower against the traditional safe haven yen, with down 0.29% to 108.48, but remained above Friday’s four month trough of 108.03. The dollar fell almost 1.3% against the yen last week.

Investors tend to seek out the yen in times of market turbulence as the currency is backed by Japan’s current account surplus, which offers it more resilience than currencies of deficit-running countries.

In Japan, reports on Monday indicated that Haruhiko Kuroda would be re-appointed as head of the Bank of Japan and likely continue the country’s ultra-loose monetary policy.

Sterling was little changed against the dollar and was a touch lower against the euro, with at 1.3822 and trading at 0.8870.

The pound had weakened against the dollar and the euro on Friday after Michel Barnier, the European Union’s Brexit negotiator warned Britain that a post-Brexit transition deal was “not a given”.

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