Posted on February 23, 2015 by the XM Investment Research Desk at 3:30 pm GMT
The euro fell against the dollar to reverse Friday’s gains that were made after the Greek loan extension deal was announced. Investors are being cautious as the debt deal still has a lot of uncertainty. Greece will submit a list of planned reforms later in day which have to be agreed on by the Eurozone to secure a four-month loan extension.
The initial agreement made on Friday removed the risk of the immediate threat of Greece’s exit from the Eurozone but questions still remain. Markets await anxiously for the final deal due later in the day.
Meanwhile, slightly disappointing German Ifo business climate data today also kept investors wary about the euro. The Ifo Institute’s climate indicator rose to 106.8 in February, beating the previous month’s 106.7 but it was below the 107.7 expected.
The euro fell to a low of 1.1294, down from Friday’s high of 1.1428. Against the yen, the euro reached a low of 134.43 compared to Friday’s high of 135.89. The euro only made gains versus the Swiss Franc, rising to as high as 1.0767. A general unwinding of safe have long positions weakened the swissy.
The dollar remained in its past week’s range versus the yen. In today’s European session, highs of 119.34 and lows of 118.80 were hit. Today’s US existing home sales data placed the dollar under pressure after figures showed home resales fell sharply to their lowest level in nine months in January, declining 4.9% to an annual rate of 4.82 million units. Economists forecast existing home sales falling only to a 4.97-million unit pace. The main driver for the dollar/yen pair will be Fed Chair Janet Yellen’s testimony this week. A hawkish Yellen testimony would likely push the dollar higher.