- The Euro accelerates its uptrend following BuE Bailey’s testimony on the Financial Stability Report.
- Bailey warned that the steeper yield curve reflects trade uncertainty, but he assured that this is a global trend.
- The Euro appreciates across the board after the release of the ECB’s Lending Survey.
The Euro extends gains for the third consecutive day against a weaker British Pound, and nears intra-day highs at 0.8680 following BoE Bailey’s testimony on the Financial Stability report. From a longer perspective, the pair remains halfway through last week’s trading range.
BoE Governour Andrew Bailey observed the steeper yield curves on UK treasuries, but he said that this is a global phenomenon, reflecting the greater uncertainty on trade policy, and that the UK experience on yields is not out of line with other markets.
The British Pound has pulled back against its main peers following Bailey’s commentaries, also against a broadly stronger Euro, which is drawing support from a softer US Dollar and a rather upbeat ECB Lending Survey released earlier on the day.
The ECB Survey states that the conditions of credit have not suffered any significant impact due to the trade uncertainty, and mortgage and corporate credit demand increased in the second quarter and is expected to grow further in the next quarter.
These figures strengthen the case for steady interest rates after Thursday’s ECB monetary policy meeting and have given some support to the Euro, which is the best performer among the G8 currencies on Tuesday.
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