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European Session – Euro rises above 1.10, dollar weak after ISM

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European markets were closed for the Easter holiday which led to a relatively quiet session. The euro made surprising gains versus the dollar as it received from news that Greece intends to meet all obligations to all its creditors. Greek finance minister Yanis Varoufakis met with International Monetary Fund chief Christine Lagarde over the weekend and reiterated that the Greek government will not default on a 450 million IMF euro loan repayment later this week. Better-than-expected Spanish unemployment data also helped support the single currency.

Meanwhile, a broadly weaker dollar due to weak US nonfarm payrolls data and soft ISM non-manufacturing data also helped the euro/dollar pair which hit a high of 1.1034 by early US session trading. Against the yen, the dollar fell to 118.91 before steadying back at 119.00.

The ISM non-manufacturing index reported a reading of 56.5 from February’s 56.9 but was in line with estimates. Meanwhile, the president of the Federal Reserve Bank of New York, William Dudley said today that he expects “quite weak” Q1 growth around 1% annualized. He also sees a relatively shallow rate rise path after the start of the Fed’s hiking cycle. He added that the downside risks to the US economic outlook make the timing of Fed rate hikes uncertain. The next key risk event for the dollar will be Wednesday’ FOMC minutes.

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