Euro Climbs on Boosted Confidence in Future Outlook for Euro Area

The euro moved higher against the US dollar and the British pound on Tuesday, as traders’ confidence in the future of the euro zone improved following a speech by Angela Merkel. The greenback, on the other hand, suffered from a political scandal that involved Donald Trump Jr.

Speaking at a business conference in Bavaria, Germany, German Chancellor Angela Merkel said that the European Union stands more united than ever, despite the ongoing Brexit talks. Merkel hinted that British citizens living in the euro zone may be able to get European Union citizenship, in a response to an offer made by UK Prime Minister Theresa May in June.

The German chancellor added that Brexit is opening a window for the European Union to plan its future at a time when the economy of the euro zone appears to be healthy. Merkel said that the improved economic conditions could prompt the European Central Bank to taper down its economic stimulus.

The shared currency was further supported after Benoit Coeure, who is an executive board member of the European Central Bank, said that a weaker euro is not the aim of the central bank. Coeure stated that weakening the euro is not a part of the monetary tools used by the European policymakers, nor is it their objective.

Meanwhile, in the United States, the dollar fell as controversy surrounding President Donald Trump was stoked by reports of a connection between one of his sons and Russia. Emails released today revealed that he eagerly accepted an offer made by the Russian government to hand over damaging information about Hillary Clinton.

EUR/USD traded at 1.1470 as of 23:00 GMT on Tuesday, after rising to 1.1479 at 18:35 GMT, the pair’s highest level since May 2016. EUR/GBP was at 0.8922, from 0.8931 at 18:40 GMT, a level last seen in November 2016.

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