Forex: Euro holds gains ahead of US inflation data
Banknotes of different currencies (icon image). pexels.com
FRANKFURT (dpa-AFX) – The euro rate
The euro benefited from the renewed confidence in the financial markets on Tuesday. In contrast, the prospect of a tighter US monetary policy seems to have already been partially priced into the exchange rates.
Nonetheless, in the afternoon, attention will be focused on US inflation data. Experts expect consumer prices to rise by 7.0 percent in December compared to the same month last year.
However, it would take a massive surprise for the interest rate picture that the market is making of the US to seriously shake, wrote foreign exchange expert Ulrich Leuchtmann from Commerzbank (Commerzbank share). The fact that the US Federal Reserve will raise its key interest rate quickly seems to be a foregone conclusion, even if inflation is slightly lower than expected. “In the worst case, it won’t be March, but May or June,” the expert concluded.
And ultimately, according to the Commerzbank expert, the foreign exchange market is about whether the Fed will significantly increase its key interest rate in the next few quarters and years. A quick rate hike is an indicator for this, but not a basic condition.
Economic data from the euro zone, however, hardly moved the euro. Industrial production in the region rose faster than expected in November. However, according to revised data, production fell surprisingly in October./la/jsl/mis
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