Around 1:15 p.m., the euro took 0.14% to 1.0427 dollars, recovering without straying too far from its lowest in five years reached Friday at 1.0350 dollars.
The euro rose against the US dollar on Monday, supported by comments from the head of the Banque de France, while the greenback, a safe haven, remained favored by the slowdown in activity in China.
Around 11:15 a.m. GMT (1:15 p.m. CET), the euro gained 0.14% to 1.0427 dollars, recovering without straying too far from its lowest in five years reached on Friday at 1.0350 dollars.
“We will carefully observe developments in the course (of the euro), which is an important driver of imported inflation,” Banque de France Governor François Villeroy de Galhau said in a speech. “A euro that is too weak would go against our objective of stabilizing prices,” he added.
“The ECB (European Central Bank) is preparing a transition to a tightening of its monetary policy and this is part of the work to prepare the ground,” said Neil Wilson, analyst at Markets.com.
The US Federal Reserve has already started to act, and promises to continue to raise its rates rapidly in the months to come.
As a result, the single European currency is close to its lowest level in twenty years against the dollar (reached in early 2017 at 1.0341 dollar) and is even approaching parity with the American currency.
In addition, the dollar is benefiting from its status as a safe haven, while activity in China is affected by the confinements due to Covid-19.
Retail sales in April suffered their biggest fall in two years, while unemployment rose sharply, Chinese authorities announced on Monday.
“Lockdowns come at a cost that is evident in the April data,” UBS analysts pointed out.
“The current campaign to promote the zero Covid policy and limited advances in vaccinations ensure that the containment mechanisms are here to stay,” they warn.
The British pound stabilized against the dollar (-0.01% to 1.2261 dollar).
Currency traders will watch on Monday the hearing of Bank of England officials, including Governor Andrew Bailey, by a British parliamentary committee, which is expected to question him on his strategy to counter inflation.
As for cryptocurrencies, the rebound in bitcoin this weekend faded on Monday (-3.5% to 29,943 dollars).