NEW YORK (dpa-AFX) – The euro extended its recent setback on Thursday with a slide below $1.09. In New York trading, the common currency recently cost $1.0884, slightly above its daily low. At $1.1017, it recently reached its highest level in a good three and a half months. The European Central Bank (ECB) set the reference rate on Thursday at 1.0931 (Wednesday: 1.0985) dollars. The dollar therefore cost 0.9148 (0.9103) euros.
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The euro was impacted by the surprisingly significant decline in inflation in the currency area in November. With a price increase of just 2.4 percent compared to the same month last year, inflation is gradually approaching the ECB’s medium-term inflation target of two percent.
Core inflation, which excludes volatile prices for energy and food, also fell significantly. According to many economists, it reflects basic inflation and therefore represents the inflation trend somewhat better than the overall rate.
Experts mostly expect it to take a longer time until the ECB’s inflation target is achieved on a sustained basis. Bundesbank President Joachim Nagel, for example, regularly speaks of a difficult “last mile”. But regardless of this, the ECB’s first interest rate cuts for next year have already been priced in on the financial markets./bgf/he/gl/he