2023-07-14 10:38:45
The euro still gained some ground once morest the dollar on Friday following several signs of slowing inflation in the United States, while in the euro zone, the European Central Bank (ECB) says it wants to continue its monetary tightening.
Around 11:45 a.m., the euro took 0.05% to 1.1231 dollars, following rising to 1.1245 dollars, a peak since February 2022.
Over the week, the single currency gained almost 2.5%, taking advantage of the slowdown in inflation in the United States.
Investors believe that the US Federal Reserve (Fed) will raise its rates once more at the end of July, but that it might then interrupt its monetary tightening cycle.
And the dollar’s slide might continue, warns Antje Praefcke, an analyst at Commerzbank. “Imagine what would happen if the next inflation data surprises on the downside or if the economy shows signs of weakness from past rate hikes,” she said.
Conversely, the ECB expressed in June its determination to send a “strong signal” on inflation and to continue the “gradual tightening” of the credit valves, suggesting that other rate hikes will follow, according to the minutes of its meeting released Thursday.
“We think the minutes were pretty determined,” said Ebury analyst Matthew Ryan, noting that ECB governors felt at the time of the June meeting that the market was underestimating their willingness to hike rates following July.
“Market attention will shift to the Eurozone inflation numbers on Wednesday,” he added, warning that “a further upside surprise might lift the Euro-Dollar pair to new highs. “.
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