©Reuters. The euro falls due to the strength of the dollar in the face of risk aversion
Frankfurt (Germany), Aug 18 (.).- The euro depreciated this Thursday due to the strength of the dollar due to risk aversion and despite the fact that some data from the US economy were worse than expected.
The euro was trading at $1.0126 around 3pm GMT, versus $1.0174 in late European forex trading the previous day.
The European Central Bank (ECB) set the reference exchange rate for the euro at 1.0178 dollars.
Sales of second-hand homes in the United States (USA) fell sharply in July by 5.9%, for the sixth consecutive month (-5.5% in June), but these figures did not stop the appreciation of the ” green ticket”.
Jobless claims fell in the US last week more than expected, while the industry situation in the Philadelphia region improved in August.
These figures for the US economy were better than expected and boosted its currency.
Despite raising interest rates by 0.75 points at their last meeting in late July, members of the US Federal Reserve’s (Fed) open markets committee then recognized that it might be appropriate to slow down the frenetic rate of hikes.
“The minutes endorsed the view that the effective fed funds rate will likely end up in the 3.25-3.5% range by the end of the year,” according to analysts at Monex Europe.
ECB executive board member Isabel Schnabel hinted at a half percentage point rise in interest rates in September in the euro zone in an interview with Reuters.
“Our monetary policy decisions are guided by the inflation outlook. We see very high inflation rates. Our latest inflation projections were also quite high and the factors that drive inflation will not go away any time soon,” the German economist said.
“In July we decided to increase interest rates by 50 basis points because we were worried about the inflation outlook,” he added.
And those concerns from July have not eased, according to Schnabel, so the ECB is likely to raise the price of money by 50 basis points again in September.
“In July we decided on a 50 basis point hike in view of the inflation outlook. At this point, I don’t think these outlooks have fundamentally changed,” Schnabel said.
The euro zone had an inflation rate of 8.9% year-on-year in July.
The single currency was traded in a trading band between $1.0114 and $1.0193.