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© Reuters. The euro hardly moves and gravitates around 1.0950 dollars
Frankfurt (Germany), Apr 20 (.).- The euro is barely moving and held again around the $1.0950 level today, after the release of some disappointing data from the US economy, which points to a recession at End of the year.
The euro was trading around 3:00 p.m. GMT at $1.0978, compared with $1.0972 in the final hours of European currency market trading the previous day.
The European Central Bank (ECB) set the reference exchange rate for the euro at $1.0944.
Sales of second-hand houses fell in March in the US by 2.4% compared to the previous month and 22% year-on-year because the increase in mortgage interest rates reduces purchases.
In addition, industrial activity in the Philadelphia region contracted further in April, to the lowest levels since the pandemic, and weekly jobless claims rose last week in the US by 5,000, to 245,000, the highest since the end of 2021, indicating that the job market is cooling off.
The determination of central banks to raise interest rates to combat inflation also reduces market sentiment and risk taking.
Several members of the Governing Council of the ECB expressed their willingness to fight against inflation and in favor of raising interest rates further.
ECB President Christine Lagarde said in Paris that the bank was not at the end of its battle against high inflation and that it had to walk “a bit”, the length of which would depend on the effects of the recent turmoil on banks.
The president of the Dutch central bank De Nederlandsche Bank, Klaas Knot, considered in an interview with the Irish newspaper “Times” that it is too early to interrupt the rise in interest rates in the euro area.
Several members of the ECB have positioned themselves in recent weeks in favor of raising interest rates again in May, by 25 or 50 basis points, including its chief economist, the Irishman Philip Lane.
UniCredit (BIT:) FX Strategist Roberto Mialich believes that investors have begun to lower their expectations that the Federal Reserve (Fed) will cut interest rates later in the year, and this will support the dollar. .
Mialich rules out that the euro will appreciate much above $1.10 in the short term, but when interest rate differentials narrow further, the euro could appreciate further.
Several members of the Fed have also recently been in favor of raising interest rates further and leaving them at a high level because inflation is very high, the last to do so was the president of the Federal Reserve Bank of New York, John Williams.
Mialich expects the Fed to raise interest rates to 5.25% in the second quarter of this year and start lowering them in the first quarter of 2024.
Fed federal funds are now in a 4.75-5% range and ECB interest rates are at 3.5%.
The single currency was exchanged in a fluctuation band between 1.0933 and 1.0987 dollars.
