Thursday, June 1, 2023

Euro falls to US$1.0950 after ECB data and eurozone inflation

The euro depreciated to $1.0950 after the publication of data on the granting of loans and inflation in the euro area and remained there after data from the US economy.

He euro it was changing around 03:00 GMT at US$1.0991, compared to US$1.1022 in the last hours of European currency market trading the previous day.

He European Central Bank (ECB) set the reference exchange rate for the euro at US$1.0965.

Investors opted for caution before knowing the decisions of the Federal Reserve (Fed) and the ECB on interest rates.

The rate Annual inflation in the euro zone increased by one tenth in April compared to March, up to 7.0%, driven mainly by increases in food prices,

However, subjacent inflation fell by one tenth to 5.6%, which excludes the effect of the prices energy, food, alcohol and alcohol tobacco for being the most volatile, and it is the reference indicator for the ECB when setting its interest rate policy.

THE ECB published data that show that the granting of credit to companies and the demand for loans from companies and credits mortgages in the first quarter.

Besides, the manufacturing production The euro area records a contraction for the first time since January and the fastest deterioration in manufacturing conditions since May 2020, during the first wave of the COVID-19 lockdowns.

UniCredit’s Global Director of Research, Marco Valliexpects that the ECB will raise its interest rates by 25 basis points on Thursday taking into account all this data.

He dollar is pressured by the fall in the yield of the US Treasury debt to 10 years to 3.5% and two years to 4.1%.

The currency The only one was changed in a fluctuation band between US$1.0943 and 1.1005.


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