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EUR/USD rebounds as French deficit steps narrow OAT-Bund spread

The rebound comes as WTI crude fell 2.6% and U.S. dollar strength eased, alongside falling Treasury yields.

Reported · Written up by our desk · Major Pairs

Risk sentiment improved in European trade as the U.S. dollar pulled back, stock markets rose, and Treasury yields fell, with Forexlive linking the tone partly to easing oil prices despite no specific catalyst.

EUR/USD rebounded as the OAT-Bund spread narrowed further, after earlier widening peaked on Friday at the highest levels since the European debt crisis.

Forexlive said some of the improvement may have reflected position squaring after overstretched levels, but noted that France also unveiled plans to sharply narrow its budget deficit by restraining spending and raising tax revenues.

The outlet added that the bond market scare has pressured policymakers to shift course, which it said could come before a broader reversal in conditions.

Latest closeEUR/USD 1.122 ▼0.3%

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