2023-07-14 10:38:45
The euro still gained some ground against the dollar on Friday after several signs of slowing inflation in the United States, while in the euro zone, the European Central Bank (ECB) says it wants to continue its monetary tightening.
Around 11:45 a.m., the euro took 0.05% to 1.1231 dollars, after rising to 1.1245 dollars, a peak since February 2022.
Over the week, the single currency gained almost 2.5%, taking advantage of the slowdown in inflation in the United States.
Investors believe that the US Federal Reserve (Fed) will raise its rates again at the end of July, but that it could then interrupt its monetary tightening cycle.
And the dollar’s slide could continue, warns Antje Praefcke, an analyst at Commerzbank. “Imagine what would happen if the next inflation data surprises on the downside or if the economy shows signs of weakness from past rate hikes,” she said.
Conversely, the ECB expressed in June its determination to send a “strong signal” on inflation and to continue the “gradual tightening” of the credit valves, suggesting that other rate hikes will follow, according to the minutes of its meeting released Thursday.
“We think the minutes were pretty determined,” said Ebury analyst Matthew Ryan, noting that ECB governors felt at the time of the June meeting that the market was underestimating their willingness to hike rates after July.
“Market attention will shift to the Eurozone inflation numbers on Wednesday,” he added, warning that “a further upside surprise could lift the Euro-Dollar pair to new highs. “.
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