FRANKFURT (dpa-AFX) – The price of the euro fell slightly on Friday. The European common currency cost 1.1604 US dollars in the afternoon. In the morning it was quoted a little higher. The European Central Bank set the reference rate at 1.1595 (Thursday: 1.1599) dollars. The dollar therefore cost 0.8624 (0.8621) euros.
Better-than-expected economic data from Germany hardly moved the foreign exchange market. The mood in the German economy recovered somewhat in May after slumps in the previous months. The increase in the Ifo business climate was also unexpected. Economists had expected a slight decline. “The German economy is stabilizing for the time being, but the situation remains fragile,” commented Ifo President Clemens Fuest.
Commerzbank chief economist Jörg Krämer does not yet see a change for the better. “The Iran war and the high oil price are taking their toll; the German economy is likely to shrink in the second quarter after growing noticeably in the first,” says one comment. “With each additional day that the Strait of Hormuz remains closed, economic risks increase.” The situation in the Middle East is likely to continue to influence events on the markets.
In the afternoon, statements from the US Federal Reserve supported the dollar. Fed board member Christopher Waller does not want to hold out the prospect of a rate cut. The central bank should delete the relevant wording from its official statement on interest rate policy, he said at a conference in Frankfurt. This should make it clear “that a Interest rate cut is no more likely than one in the future Interest rate increase“. This is notable because Waller has recently repeatedly spoken out in favor of future interest rate cuts.
For other important currencies, the ECB set the reference rates for one euro at 0.86418 (0.86433) British pounds, 184.53 (184.59) Japanese yen and 0.9119 (0.9145) Swiss francs. A troy ounce of gold (around 31.1 grams) last cost $4,511. That was $31 less than the day before./jsl/he