Weak US economic data and persistently high German inflation caused the euro to rise further on Wednesday.
In New York trading, the euro common currency last cost 1.0921 US dollars. The European Central Bank had previously set the reference rate at 1.0886 (Tuesday: 1.0803) dollars; the dollar had thus cost 0.9186 (0.9257) euros.
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According to employment services provider ADP, the US private sector created fewer jobs in August than expected. Job growth was the lowest since March. In addition, the US economy grew less strongly in the second quarter than determined by an initial estimate. This dampened expectations that the US Federal Reserve would raise interest rates again in September – which would make the dollar more attractive as an investment currency.
However, the ADP report has little meaning for the far more important official jobs report of the government, which is due on Friday, stressed analyst Craig Erlam from broker Oanda, in line with Ian Shepherdson from the consulting firm Pantheon Macroeconomics. The consumer prices and data on personal income and expenditure due on Thursday would also have more significance for the market.
At the same time, the euro received support from consumer price data from Germany. The inflation rate fell in August, but less than expected. Figures for the entire euro area are due on Thursday. After a series of rate hikes, the ECB has so far kept its further course open. The next rate meeting is scheduled for mid-September.
According to Ulrich Kater, chief economist at Dekabank, “the disappointing August figures should (but) not be overstated”. They are “not decisive for whether the European Central Bank raises interest rates again in September”.
/gl/he
NEW YORK (dpa-AFX)