The euro’s decline to six-week lows against the US dollar has not lasted long and further downside could be put on hold. There are a couple of factors that could be lending some support to the single currency. First, economic data continues to paint a picture of slow, but steady recovery. Second, there are reports that Greece could return to debt markets signalling an end to years of austerity and uncertainty. Lastly, there were also reports that Gazprom could consider converting US dollar settlements in to euros. The suggestion comes amidst increased geopolitical tensions in the Ukraine. The increased tensions are already having a positive impact on the Swiss franc, which is considered to be a safe haven for investors. Sterling is also seeing some support after a British Chamber of Commerce survey showed growth in one sector of the economy performing better than expected. The survey comes in front of the industrial and manufacturing output data, which is also expected to reflect a growing economy.

Sterling

Sterling has regained its footing as the currency is seeing some support from a British Chamber of Commerce survey of businesses. The survey showed six important manufacturing indicators hitting record highs during the first quarter of this year. The survey continues to paint a clear picture of an economic recovery, which is supporting the view that the central bank may be closer to raising interest rates than it would like to think. The survey comes just in front of the industrial and manufacturing output figures, which are forecast to remain in positive territory.

US dollar

The dollar moved briefly to six-week highs against the euro, but has been unable to hold onto recent gains. Consumer credit rose unexpectedly on the back of non-revolving credit such as auto and student loans. Fed’s Bullard said that last week’s non-farm payrolls data did not alter the outlook for tapering the central bank’s Quantitative Easing program. Markets are more or less back on hold until this week’s release of the March FOMC minutes. One eye is also closely turned towards the Ukraine as tensions start to mount on that front again.

Euro

The expectation that the European Central Bank was close to embarking upon a Quantitative Easing program eased somewhat on the back of comments from policy makers. Two policymakers seemed to suggest that prices appear stable and that asset purchases might not be required. Additionally, the German output figures showed unexpected improvements, while the Sentix sentiment survey remained near two-year highs. The prospects of Greece returning to debt markets, despite talks of a third bailout could also be supporting the euro. And there are reports that Gazprom could consider converting US dollar settlements into euros if tensions heat up in the Ukraine.

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