Why the euro remains stable above $1.08

The euro barely moved on Friday.

In midday trading, the common currency cost 1.0815 US dollars. It remained at the level from early trading. The European Central Bank (ECB) set the reference rate at $1.0826 on Thursday afternoon.

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The consumer price data published this morning from the Eurozone did not move the euro sustainably. Inflation in the euro zone weakened again in February, but not quite as much as expected. The inflation rate fell from 2.8 percent in the previous month to 2.6 percent. A decline to 2.5 percent was expected.

There is currently speculation about when the ECB will cut interest rates in view of falling inflation. Economists remain cautious. “Wages are rising significantly, especially in the service sector,” writes Thomas Gitzel, chief economist at VP Bank. The danger of second-round effects has not yet been averted. “And that’s precisely why the ECB will not use the decline in inflation to celebrate,” says Gitzel. “Instead, wage developments should continue to be carefully monitored and none for the time being Interest rate cut be launched.” He expects a first reduction in June.

This morning, the Swiss central bank SNB announced a surprising change in personnel: the long-time central bank chief Thomas Jordan (61) is stepping down at the end of September. “After overcoming the various challenges of the last few years, now is the right time to step down from my position,” said Jordan. The SNB did not provide any information about a successor. The Swiss franc barely reacted to the news.

/bgf/ngu

FRANKFURT (dpa-AFX)

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