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Out of steam? Euro stalls around recent highs (for now)

Are we there yet? Maybe. The euro is holding on to its recent gains, but not making any further headway just yet.

At pixel time, it is pretty much flat on the day, at $1.1650.

Analysts broadly think this is likely to be only a pause.

Stefan Koopman at Rabobank writes:

The Euroboom! narrative gets increasingly more compelling. The currency union still faces some political challenges – both internally and externally – but it has passed a few significant hurdles in recent months. The Franco-German axis is getting increasingly stronger and if Merkel wins this autumn’s German elections, there might be fresh momentum to push forward and actually improve the functioning of the Eurozone instead of letting it fall apart. On the economic front, consumer and business confidence is at multi-year highs and GDP growth has picked up nicely in the past quarters. Of course, the central bank finds itself in a difficult position as its QE programme is nearing technical exhaustion whereas the inflationary pressures that should have been generated remain largely absent. However, even Mr. Draghi himself appears to regard this as only a minor detail in what is an overwhelmingly good news story.

On a year-to-date basis, the dollar is down a staggering 10.8% vs. the “failed currency” (the euro) and 5.4% vs. Brexit’s sterling and Abenomics’ yen.