Euro firms against yen, flat versus dollar ahead of central bank meetings
SPY•The euro rose 0.37% against the yen to 176.15 and was flat at $1.1201 on Monday, as lower oil prices and Moody's decision to leave France's credit rating unchanged eased pressure. Five major central banks are due to announce policy decisions later this week.
1. Euro gains against yen
The euro rose 0.37% against the yen to 176.15 and held steady at $1.1201 against the dollar on Monday. Falling oil prices and an unchanged French credit rating helped ease pressure on the single currency ahead of a busy week of central bank meetings.
2. French bond concerns ease
French government bond prices rose after Moody's left France's rating unchanged, easing pressure on a government struggling to shore up strained finances. The yield gap between French OATs and safe-haven German Bunds narrowed to 160 basis points, from 176 basis points last week, its widest since 2011. Strategists said French fiscal concerns may persist ahead of the presidential election in April or May.
3. Central banks in focus
The Federal Reserve, European Central Bank and Bank of Japan are expected to hold rates steady this week, while New Zealand's and Canada's central banks are expected to raise rates. Investors will look for clues about the outlook, including whether a potential selloff in U.S. equities could affect the Fed's policy stance. Separately, Brazil's real was set to fall sharply after President Luiz Inacio Lula da Silva won a fourth term.
