Around 9:35 p.m., the single currency was almost stable (+0.02%) once morest the greenback, at 1.0545 dollars.
The euro picked up a bit on Friday following once more coming close to a 5-year low, encouraged by the proactive remarks of two officials from the European Central Bank (ECB).
Around 7:35 p.m. GMT, the single currency was almost stable (+0.02%) once morest the greenback, at 1.0545 dollars. It had fallen earlier to 1.0483, not far from the 1.0472 reached on April 28, for the first time since January 2017.
“Comments (in favor of monetary tightening) in Europe have given a boost to the euro,” commented Joe Manimbo of Western Union in a note.
The president of the German central bank (Bundesbank), Joachim Nagel, warned that “the window” which was to allow the ECB to normalize its monetary policy “is (closing) slowly” and “that we (have to) do something this year”.
Also a member of the Governing Council of the ECB, Bostjan Vasle went further, believing that it would be appropriate to start raising the key rate before the summer, while the most daring mentioned July so far.
The institution’s next monetary policy meeting is scheduled for June 9.
“The ECB is clearly gearing up for a hike in June or July,” said Brad Bechtel, director for foreign exchange at Jefferies. “It looks like most are in the July camp.”
“We have not heard from (ECB President Christine) Lagarde on this subject,” he continued. “The key is her.”
For the analyst, a rate hike will not be a miracle cure, as shown by the trajectory of the Bank of England (BoE), which despite a fourth consecutive hike on Thursday expects inflation to persist until ‘in 2023.
Moreover, the BoE’s battering did not support the pound sterling either, which fell on Friday to its lowest level in 22 months once morest the dollar.
Like others, Brad Bechtel does not exclude that the currency common to 19 European countries will fall back to parity with the dollar.
Elsewhere in the foreign exchange market, the ruble was moving on Friday not far from its highest level since January 2020, reached on Thursday. Since the beginning of March, it has fallen by 65%, despite the continuing conflict in Ukraine.
For Brad Bechtel, the recovery of the Russian currency reflects a very narrow market, on which the volumes traded are very low, mainly driven by purchases by operators who want to acquire Russian raw materials, oil in particular.
