Euro Calm After Spain Poll; Trump Hits Petrocurrencies
Major currencies were little changed in early trading in Europe Monday, although a positive tone in equity markets in the wake of the U.S. GDP report on Friday helped the Aussie and kiwi to strengthen a little against the dollar.
There was no obvious impact on the euro from the general election in Spain, which was won by the center-left PSOE party, as predicted by opinion polls ahead of the vote. PSOE leader Pedro Sanchez won’t be able to form a majority government with Podemos, the more radical of Spain’s two left-wing parties, which makes it less likely that Spain will now draft budgets with excessive deficits and further destabilize the fiscal consensus in the euro zone.
At 03:00 AM ET (0700 GMT), the euro was at $1.1161, only fractionally above the two-year low that it fell to last week. It’s being supported by profit-taking in crude oil on the back of Twitter comments from President Donald Trump at the weekend. Trump said he “spoke to Saudi Arabia and others about increasing oil flow.” Lower oil prices typically benefit the euro zone, an oil importer. The flip side is that petrocurrencies like the Russian ruble suffer. It's down around 1.5% from last week's high.