Euro falls below 1.07 dollars: economic data weighs on the currency

Euro falls below 1.07 dollars: economic data weighs on the currency

The euro fell below the $1.07 mark during US trading on Tuesday. Some economic data pointed to stronger inflation trends - labor costs rose more than expected in the first quarter and house prices showed a larger-than-expected increase, indicating continued inflation. These developments have drawn attention to the Fed's upcoming interest rate decision, expected on Wednesday.

It is currently expected that the Fed will not make its first interest rate hike until late summer. Expectations of interest rate cuts had weakened in recent weeks due to stubborn inflation. The signals regarding monetary policy over the course of the year are therefore monitored particularly closely. A further deterioration in consumer confidence in April, which fell to its lowest level since summer 2022, adds to concerns about the economic outlook.

With the euro below $1.07 and the Fed decision in sight, the foreign exchange markets are in motion. The situation remains volatile against the backdrop of global economic developments, as uncertainty about further interest rate policy and inflation remains. The European Central Bank set the reference rate of the euro at 1.0718 dollars in Frankfurt in the afternoon, and the dollar was therefore valued at 0.9330 euros. It remains to be seen how the currency markets will develop in the coming days.