FX.co ★ Euro Edges Higher

The euro advanced closer to the $1.13 mark, continuing its recovery from the one-month low seen on May 12th. This rise was largely attributed to the widespread weakness of the US dollar. The dollar’s decline came after Moody’s downgraded the US credit rating by one notch, moving it from Aaa to Aa1. This adjustment was due to increasing concerns over the growing government debt and expanding fiscal deficits in the US. Such downgrade has heightened fears about possible economic consequences within the United States and has negatively impacted American assets. Meanwhile, the European Union and the United Kingdom reached a preliminary agreement on critical issues such as defense and security cooperation, fisheries, and youth mobility, just before the EU-UK summit scheduled for Monday. As per EU officials, this arrangement might enable British companies to engage in significant EU defense contracts, signifying progress in post-Brexit relations. Concerning monetary policy, the European Central Bank is anticipated to proceed with lowering interest rates in June, with prospects for additional easing thereafter.