HomeFinancial MarketsEuro Gains Ground Against Dollar Following Release Of Inflation Data

Euro Gains Ground Against Dollar Following Release Of Inflation Data

The euro rose to a one-week high against the dollar on Thursday following the release of positive inflation data from Germany. The data helped to ease investor concerns over the banking sectors well as lift the EU currency.

German inflation edged lower as energy prices eased, however, it remained higher than forecasts, thereby keeping pressure on the European Central Bank to continue its tight fiscal policy that includes maintaining interest rate hikes.

Separate data indicated that Spain’s consumer prices rose at 3.3% year-on-year; the slowest pace since the 12-month period through August 2021. Slower than analysts’ expectations, this development also gave rise to improved European economic sentiment.

On Thursday, the euro gained 0.55% against the U.S. dollar to rise to $1.09035 – a trend that Mark Haefele, chief investment officer at UBS Global Wealth Management, expects to continue.

“We believe the main pillars of U.S. dollar strength last year — aggressive tightening by the Federal Reserve and a resilient U.S. economy — are unlikely to support the currency going forward,” Haefele observed.

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