Monday's Major Forex Pairs Analysis: EUR/USD, GBP/USD, USD/JPY
ICM Brokers | Jun 01, 2015 02:39AM ET
EUR/USD
The euro moved higher against the dollar on Friday after data showed that the U.S. economy contracted in the first quarter, but continued expectations for a rate hike later this year continued to underpin dollar demand. The single currency remained under pressure as Athens continued long-running negotiations with its lenders on a cash-for-reforms deal ahead of a €305 million payment to the International Monetary Fund due on June 5. The Greek government expressed confidence on Friday that a deal with creditors is close. However, the country’s creditors have played down optimism over an agreement. IMF head Christine Lagarde warned Friday that a deal was very unlikely to come soon, while the European Commission said that more work must be done.
GBP/USD
The pound was lower against the dollar for the sixth straight session on Friday as a combination of concerns over a possible British exit from the European Union and soft economic data weighed. The pound has come under pressure amid renewed concerns over a U.K. referendum on EU membership. Prime Minister David Cameron’s government introduced a law in parliament on Thursday to ensure the referendum will be held by the end of 2017. Sentiment on the pound was also hit after a report on Friday showed that British consumer sentiment deteriorated unexpectedly this month as optimism about the economy over the next 12 months declined.
USD/JPY
The U.S. dollar held steady against the yen on Friday, hovering close to an 13-year high after mixed Japanese data and as demand for the greenback remained broadly supported by expectations for a U.S. rate hike this year. Japan, data earlier showed that industrial production increased by 1.0% last month, exceeding expectations for a 0.8% rise, after a 0.8% fall in March. A separate report showed that Japan's household spending dropped 5.5% in April, compared to expectations for a 0.7% slip, after a 2.4% rise the previous month.
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