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Euro under pressure: Dollar boosted by US inflation data
The euro is coming under pressure after strong US inflation data. Experts discuss implications for monetary policy. Read more here. #Euro #Inflation #US data
Euro under pressure: Dollar boosted by US inflation data
The euro fell sharply on Wednesday on US inflation data, falling below the $1.08 mark. In the afternoon the exchange rate of the common currency was 1.0755 dollars. Before the inflation data from the USA was published, the euro was valued about one cent higher. The European Central Bank set the reference rate at 1.0860 dollars, while the dollar was at 0.9208 euros.
Released US inflation data has seen the dollar strengthen against all major currencies. Consumer prices rose 3.5 percent in March from a year earlier, higher than analysts expected. This could have an impact on the monetary policy of the US Federal Reserve, which has so far kept key interest rates stable. Forecasts of possible interest rate cuts have been dampened by the current data.
Experts at Commerzbank no longer expect an interest rate cut in June due to the latest labor market data and inflation developments. They assume that the key interest rates will only be adjusted gradually, instead of a classic cycle of interest rate cuts. It was found that higher interest rates tend to support a currency. In the Eurozone, however, a key interest rate cut is still expected in June as economic development is weaker.
The European Central Bank set the reference rates for one euro at 0.85515 British pounds, 164.89 Japanese yen and 0.9810 Swiss francs. Gold prices traded at $2,349 in London, down $3 from the previous day.