Euro-dollar exchange rate: That is why the euro has recovered against the US dollar

The common currency euro climbed above the 1.07 dollar mark with 1.0720 US dollars last paid. However, in early Monday trading, the price had fallen to its lowest level in just over a month at $ 1.0656. The European Central Bank (ECB) set the reference rate at 1.0686 (Friday: 1.0690) dollars. The dollar thus cost 0.9358 (0.9355) euros.

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Crucial economic data was not published at the beginning of the week, so investors’ attention was focused on statements by high-ranking central bank officials. According to Portugal’s central bank head Mario Centeno, the pace of future interest rate hikes will depend on the medium-term price outlook. Centeno told Bloomberg TV that the pace of tightening would slow down if there were signs that inflation was falling towards 2 percent.

Meanwhile, the EU Commission assesses the inflation prospects somewhat more favorably than before. So will the headline inflation in the euro zone expected to fall from 8.4 percent in 2022 to 5.6 percent this year. 2.5 percent is expected for 2024.

According to estimates by the US Federal Reserve, the phase of falling inflation rates has already begun in the USA. Investors are therefore already eagerly awaiting data on the development of US consumer prices in January, which will be published on Tuesday. Inflation is expected to have continued to fall. This would be on a less restrictive basis monetary policy US Federal Reserve’s fight against high inflation, which caused the dollar to weaken against many other major currencies. Sharply rising interest rates tend to support a currency.

NEW YORK (dpa-AFX)

Image sources: Yingko / Shutterstock.com, Marian Weyo / Shutterstock.com

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