Merkel says euro is too weak due to European Central Bank policy

The euro hits a massive six-month high today against the U.S. dollar; senior FX strategist at IG, Junichi Ishikawa said that "While the ebb in French political risk and prospects of a European Central Bank policy shift have helped the euro, the biggest support factor still remains the recent weakening of the dollar in wake of 'Russiagate, '".

"T$3 his time last week Theresa May's Conservatives were enjoying a 20-point lead over its nearest rivals Labour".

"Whether or not GBP/USD falls below this level and back towards $1.25 may depend on how well Team May deals with this polling shock".

While macroeconomic data out of the Eurozone will influence the Euro, we expect the Dollar to make up some lost ground through the European and U.S sessions, with tomorrow's FOMC monetary policy meeting minutes unlikely to show the FED taking its foot off the gas vis-à-vis normalizing monetary policy.

Global benchmark Brent retreated 0.8 per cent to US$53.44 a barrel. It hit its highest level since May 2015 on Monday, posting its biggest one-day gain in over two months. The greenback weakened as US political turmoil reduced expectations of rapid USA interest rate rises.

Uproar over Trump's recent firing of FBI Director James Comey, who was overseeing an investigation into possible links between the president's team and Russian Federation, has pressured the dollar. Investors continue to focus on the problems that have engulfed President Donald Trump's USA administration over the last week but there were other familiar and not so familiar issues to deal with too.

Sterling eased nearly 0.1 percent to $1.299, recovering some earlier losses.

The Pound ended London trading modestly higher against the US Dollar on Monday despite the release of a number of polls that showed support for the Conservative Party had tailed off in the past few days.

Political turmoil in Washington has also raised worries that there could be delays in Trump's efforts to implement his economic stimulus plans and a shortening of the odds on betting markets that he would not see out the term begun in January. An uncertain political climate in the USA weighed on the dollar. Dollar / yen bounced off a session low of 110.85. Meanwhile, news over the weekend that the United Kingdom would walk away from Brexit discussions should it be forced to pay up as much as 100 billion Euros led to no more than a temporary sell-off in the currency on Monday. The Shanghai Composite lost 0.5 per cent.

U.S. Treasury yields were little changed as selling tied to this week's government and corporate bond supply offset safe-haven bids underpinned by worries about investigations into possible links between Trump's campaign officials and Russian Federation.

Korean shares surged 0.8 percent, remaining slightly below an all-time high hit earlier on Tuesday.

The safe-haven yen advanced against major peers like the dollar and euro but its gains were modest.

The euro set a new six-month month high against the United States dollar on Tuesday and the region's shares made gains as the latest economic data made for some encouraging reading, especially in Germany. Spot gold climbed 0.2 percent to $1,262.82 an ounce in its third straight session of gains.

  • Zachary Reyes