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‘Reigning supreme’: Euro edges up to new 14-month high ahead of Yellen testimony

The euro has climbed to its highest intraday level against the dollar in more than 14 months ahead of congressional testimony from US Federal Reserve chair Janet Yellen.

The single currency rose to $1.1489 in morning trade in Europe, the highest level since May 5, 2016.

The single currency is the best-performing major currency of the year so far against the dollar, up 9.1 per cent. The latest gains come ahead of semi-annual testimony to Congress from Ms Yellen, slated to begin later on Wednesday.

Strategists at Crédit Agricole wrote that the euro “will continue to reign supreme in the absence of any evidence that the [European Central Bank] is worrying about the impact of the FX appreciation on the economic outlook”.

They added that the the ECB’s July meeting next week “could provide the best venue to express any such concerns.”

Commerzbank, meanwhile, notes:

The publication of compromising details of a meeting between the President’s son Donald Trump Jr. and a Russian lawyer close to the Kremlin would probably not have been sufficient on its own to carry the euro into the immediate vicinity of $1.15. The FX market has long since abandoned all hope of seeing any powerful economic reforms that developments like the Russia crisis could delay.