European currencies remained weak, weighed down by higher oil prices and rising US Treasury yields. In London trading, the euro and pound renewed their lows against the dollar, while the risk of higher energy prices was a focus for market participants.
European currencies were weak in morning London trading, with the euro renewing its daily low at around 1.1287 against the dollar and the pound at around 1.3210. EUR/JPY and GBP/JPY also retreated after the yen’s weakening trend paused, with EUR/JPY falling from a high near ¥179 to the ¥178.60 area.
According to reports, the US government signaled the possibility of banning diesel exports, and moves to ask France and Germany to release reserves were reported. Although Europe’s manufacturing PMI remained in expansion territory, the risk of higher energy prices was a key market consideration.
Levels of 1.1290 for EUR/USD, 178.82 for EUR/JPY, 1.3211 for GBP/USD and 209.25 for GBP/JPY were indicated. Concerns related to energy were restraining movements in European currencies.
Market participants are expected to remain alert to energy supplies and US yield trends.