Euro (EUR) Exchange Rate: Euro Hits Highest Level of 2014 against the US Dollar
The common currency was able to achieve its strongest level against the US Dollar so far this year following the release of upbeat retail sales figures for Germany and encouraging inflation figures for the Eurozone.
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A report published early into European trading showed that German retail sales jumped by 2.5 per cent in January, month-on-month, rather than rising the 1.0 per cent predicted.
Later, inflation figures for the 18-nation currency bloc revealed that consumer prices climbed by 0.8 per cent in February year-on-year – more than the 0.7 per cent forecast and slightly closer to the European Central Bank’s target.
As inflation is one of the biggest downside risks facing the Eurozone, the report adds to the case for the European central bank refraining from introducing any additional stimulus measures when it meets next week.
The Euro consequently leapt by 0.7 per cent against the US Dollar and advanced on almost all of its currency counterparts.
However, in the opinion of Frankfurt economist Jorg Kramer, the ECB is likely to cut its main interest rate next week. Kramer commented; ‘Most ECB Governing Council members have tried to keep all options open for the March meeting, and it is therefore uncertain as to whether a majority of ECB council members attach more weight to the factors supporting a further rate cut.’
A separate report showed that unemployment in the Eurozone held at 12.0 per cent in January, although the level of joblessness in Italy did jump to a new record high.
While the Euro may remain supported against several of its currency counterparts as we head into the weekend, gains against the US Dollar could be trimmed if today’s US growth data surprises to the upside.
Next week investors will be focusing on Thursday’s ECB announcement, but Euro movement could also be occasioned by French/German/Eurozone manufacturing and services PMI, Eurozone retail sales figures, Eurozone growth data, German factory orders figures and the German industrial production report.
Currently the Euro is trading against the Pound in the region of 0.8249 and is trading against the US Dollar in the region of 1.3792