Euro shrugs off Merkel’s dovish comments

Germany's Chancellor Angela Merkel gives a speech at the state party conference of the CDU Lower Saxony in Celle, Germany, 13 October 2012. By nominating McAllister as their main candidate, the Christian Democrats officially opened the campaign for the 2013 Lower Saxony election. Photo: Julian StratenschulteThe euro pared its earlier losses against the green currency on Friday, shrugging off dovish comments from German Chancellor Angela Merkel.

”Too strong” euro made the mission of adopting reforms more difficult by Europe’s periphery nations, including Spain and Portugal, Merkel said.

It is rarely to hear Merkel talking about the currency, but the euro ignored the comments to rise to 1.1266 versus the U.S. dollar after hitting a bottom of 1.1149.

The single currency is set for its second weekly gain despite concerns from Greece, buoyed by a rise in European debt yields this week.

Greece will reach a deal with its creditors by June 18 with the euro-area finance ministers meeting, a Greek official said.

The official said Athens sent a new plan that included debt restructuring and low budget surplus.

In addition, Prime Minister Alexis Tsipras spoke with European Commission President Jean-Claude Juncker about the coming steps of negotiations.

The euro dropped on Thursday after the IMF said it exited negotiations with Greece, causing a panic in markets that Greece would face default at the end of this month when a debt payment of 16 billion euros matures.

Ahmed Mamdouh

Ahmed Mamdouh, Co-Founder and Head of English Fundamental Analysis at FXComment.com, with 7 years of experience in the financial markets. Mamdouh holds a Master’s Degree in Economics from The American University in Cairo and a Bachelor Degree in Economics from The Faculty of Economics and Political Science, Cairo University.

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