Euro Trims Declines
The euro fell slightly on Wednesday due to conflicting inflation statistics from Germany and Spain, creating a difficult background for European Central Bank policies.
In early London trade, the euro sank to a six-day low as data indicated that June prices in the German state of North Rhine-Westphalia (NRW) were 0.1 percent lower than in May.
However, the euro recovered some of its losses. It flattened the day after data revealed that Spanish 12-month inflation had climbed to 10.2 percent in June. It went from 8.7 percent in May and over 10% for the first time since April 1985.
However, the strength of Spanish CPI inflation statistics later undid the euro’s downward pressure, presenting the ECB with even more challenges in deciding policy, she added.
Investors will be following German national inflation statistics due on Wednesday and a panel discussion at the ECB Forum in Sintra, Portugal, featuring three prominent central bankers.
ECB President Christine Lagarde, Federal Reserve Chairman Jerome Powell, and Bank of England Governor Andrew Bailey will all speak.
At the ECB’s annual forum on Tuesday, Lagarde provided little new insight into the course of European interest rates. The European Central Bank (ECB) should raise interest rates for the first time in a decade in July, following its global peers, to cool surging inflation. Still, experts are divided on the extent of any hike. Meanwhile, the dollar rose as investors sought protection in US assets. Meanwhile, stocks fell globally due to the growing likelihood of a recession.
The safe-haven dollar index (DXY) compares the greenback to six currencies. It rose 0.1 percent to 104.65 but remained below a two-decade peak two weeks ago. The dollar rose on Tuesday. Meanwhile, the euro remained below $1.06 as European Central Bank (ECB) President Christine Lagarde provided no new information about the central bank’s policy outlook. The US dollar index hit a two-decade high of 105.79 this month. It was up 0.462 percent at 104.440 at the time of writing.
In other news, rising oil prices boosted the Canadian and Australian currencies by 0.21 percent and 0.13 percent, respectively. Oil prices have surged 10% in less than a week due to supply fears. Meantime, Brent oil is trading just below $117.
The post Euro Trims Declines appeared first on forexinsider24.com.