FRANKFURT (dpa-AFX) – The euro fell below 1.11 US dollars on Monday after weak economic data. In the afternoon, the common currency cost $ 1.1080. In early trading, the euro was a good half a cent higher. The European Central Bank set the reference rate at 1.1096 (Friday: 1.1123) US dollars. The dollar thus cost 0.9012 (0.8990) euros.
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The euro was burdened by the very weak purchasing manager indices. The key figure collected by S&P Global in a company survey for the euro zone fell to its lowest level in eight months in July. The indicator shows a contraction in the economy. Industry is particularly weak. Bank economists interpreted the figures soberly: “The recession is approaching,” says a comment by Commerzbank expert Christoph Weil. “The economic outlook continues to deteriorate,” warned Thomas Gitzel, chief economist at VP Bank from Liechtenstein.
It is questionable how the development will affect the monetary policy of the ECB. It is almost certain that their key interest rate will continue to rise this week. The central bank council will make its decisions on Thursday. The course that follows is uncertain. According to Commerzbank economist Weil, the S&P survey data speak against the ECB raising interest rates further after July. In addition to the central bank, the monetary policy committee of the US counterpart, the Fed, will make its interest rate decision on Wednesday. A further increase is also expected.
For other important currencies, the ECB set the reference rates for one euro at 0.86350 (0.86706) British pounds, 156.47 (157.63) Japanese yen and 0.9595 (0.9630) Swiss francs. An ounce of gold was trading at $1,959 in London this afternoon. That was about $2 less than Friday./jsl/la/he