Euro dollar exchange rate: Why the euro exchange rate against the US dollar hardly moves

The euro moved little on Wednesday.

At midday the common currency cost 1.0770 US dollars. The European Central Bank (ECB) set the reference rate at $1.0743 on Tuesday afternoon.

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The euro received slight support from statements from the ranks of the ECB. The German ECB director Isabel Schnabel warned in an interview with the “Financial Times” of a resurgence of inflation. With a view to possible interest rate cuts, the ECB must therefore act “patiently and cautiously”. Significant easing by the European monetary authorities is expected on the markets this year. However, bank economists often rate market expectations as exaggerated.

Production data from German industry was once again disappointing. In December, total production fell by 1.6 percent. This was not only stronger than analysts expected, but also the fourth decline in a row. “The downward trend continues,” commented analyst Jens-Oliver Niklasch from Landesbank Baden-Württemberg. Since May 2023, production has shrunk or stood still. “This shows what a difficult situation the industry is in here.”

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FRANKFURT (dpa-AFX)

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