The euro rose on May 11, hovering close to a 2-½ month high, it reached in the previous session, after the data showed German investor sentiment jumped to its highest point in May since the start of the Covid-19 pandemic. The ZEW economic research institute said its survey of investors’ economic sentiment increased to 84.4 points from 70.7 the previous month. It is the best result in more than 20 years.
The single currency gained 0.35% to $1.2170, holding just below a February 26 high of $1.2179 hit on May 10. The euro advanced 4% from a five-month low at the end of March.
Its gains were also supported by widespread dollar weakness, as investors are closely monitoring the situation. Appearances later on Tuesday from U.S. Federal Reserve members will be assessed for clues as to central bank thinking.
The U.S. jobs report failed to meet expectations and it triggered a widespread selloff in the greenback. Many economists expected to see great results amid signs that the U.S. economy was roaring back to life. The reality was different, as the unemployment rate rose to 6.1% amidst an escalating shortage of available workers.
Commodity prices raised concerns of higher inflation in the next couple of months. But markets believe the Federal Reserve will remain on hold.
Euro, dollar, and other currencies
The euro is not the only currency that strengthened its position on Tuesday.
Resource-oriented currencies including the Canadian dollar and the Australian dollar consolidated gains. A rally in commodity prices helped to boost their appeal.
The Australian dollar reached $0.7827, hovering just below a two-month high it reached on Monday. The Canadian dollar stabilized near a four-year high, while the New Zealand dollar settled comfortably at February highs.
Against its main rivals, the U.S. dollar steadied at 90.283, just above a February 25 low of 90.03 it reached in the previous session.