The euro was stronger on Tuesday on new data that tended to reinforce the expectation that eurozone interest rates will be raised again. The probability that the European Central Bank will send rates higher in May has been estimated at anywhere from 50 percent to 90 percent, and some analysts even suspect that a hike might come in April. Among the data adding credence to these predictions are a higher Ifo business sentiment index out of Germany that put sentiment at a 15-year high in March. Additionally, the eurozone’s M3 broad money supply was up to 8 percent in February, from 7.6 in January.

At mid-day in New York, the euro had gained 0.5 percent to $1.2070 versus the US dollar. The shared currency was up by 0.9 percent to ¥141.50 in relation to the Japanese yen, and it rose 0.4 percent to £0.6902 against sterling.

Tags: Exchange Rates News, Interest Rates News by Brian Turner
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The euro was stronger on Tuesday on new data that tended to reinforce the expectation that eurozone interest rates will be raised again. The probability that the European Central Bank will send rates higher in May has been estimated at anywhere from 50 percent to 90 percent, and some analysts even suspect that a hike might come in April. Among the data adding credence to these predictions are a higher Ifo business sentiment index out of Germany that put sentiment at a 15-year high in March. Additionally, the eurozone’s M3 broad money supply was up to 8 percent in February, from 7.6 in January.

At mid-day in New York, the euro had gained 0.5 percent to $1.2070 versus the US dollar. The shared currency was up by 0.9 percent to ¥141.50 in relation to the Japanese yen, and it rose 0.4 percent to £0.6902 against sterling.

Tags: Exchange Rates News, Interest Rates News by Brian Turner
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The euro declined versus sterling and the yen on Tuesday on the news that the ZEW index of investor sentiment in German had dropped to 63.4 in March, down from 69.8 in February and against expectations of a rise to 71. The decline in sentiment was blamed on rising interest rates around the world.

The euro dropped 0.3 percent to £0.6879 versus sterling and lost 0.7 percent in relation to the yen, to ¥141.10.

Tags: Exchange Rates News, European Economy News by Brian Turner
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The euro declined versus sterling and the yen on Tuesday on the news that the ZEW index of investor sentiment in German had dropped to 63.4 in March, down from 69.8 in February and against expectations of a rise to 71. The decline in sentiment was blamed on rising interest rates around the world.

The euro dropped 0.3 percent to £0.6879 versus sterling and lost 0.7 percent in relation to the yen, to ¥141.10.

Tags: Exchange Rates News, European Economy News by Brian Turner
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The euro rose in relation to most major currencies during the week ending March 3. It was up 1.3 percent to $1.2031 versus the US dollar, gained 1 percent to ¥140.12 against the Japanese yen, and rose 0.8 percent in relation to sterling, to £0.6859.

The euro’s success came as the European Central Bank once again raised interest rates by a quarter point, to 2.5 percent, after having hiked rates by the same amount in December. Comments from ECB board members made it clear that interest rates will go up again in the foreseeable future. Besides raising rates, the ECB also revised its forecasts for growth and inflation for the year, predicting that both will be higher than previously expected.

Accordingly, Goldman Sachs raised its forecast for eurozone interest rates at the end of the year from 2.5 percent to 3 percent. Meanwhile, analysts at Citigroup attributed at least part of the euro’s advances to the narrowing yield spread between two-year government bonds in the eurozone and the United States.

Tags: Exchange Rates News, Interest Rates News, ECB: European Central Bank News by Brian Turner
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The euro rose in relation to most major currencies during the week ending March 3. It was up 1.3 percent to $1.2031 versus the US dollar, gained 1 percent to ¥140.12 against the Japanese yen, and rose 0.8 percent in relation to sterling, to £0.6859.

The euro’s success came as the European Central Bank once again raised interest rates by a quarter point, to 2.5 percent, after having hiked rates by the same amount in December. Comments from ECB board members made it clear that interest rates will go up again in the foreseeable future. Besides raising rates, the ECB also revised its forecasts for growth and inflation for the year, predicting that both will be higher than previously expected.

Accordingly, Goldman Sachs raised its forecast for eurozone interest rates at the end of the year from 2.5 percent to 3 percent. Meanwhile, analysts at Citigroup attributed at least part of the euro’s advances to the narrowing yield spread between two-year government bonds in the eurozone and the United States.

Tags: Exchange Rates News, Interest Rates News, ECB: European Central Bank News by Brian Turner
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In the eurozone on Thursday, the euro gained value after the European Central Bank voted to raise its main refinancing rate by a quarter point to 2.5 percent. At the same time, the ECB president made comments that indicated that there will be more rate hikes to come this year. He said that the current rate hike will only “contribute” to keeping inflation in check.

The ECB has predicted that inflation this year will be around 1.9 to 2.5 percent, replacing its December forecast of inflation in the 1.6 to 2.6 percent range. The Bank also predicted that the eurozone economy will grow by 1.7 to 2.5 percent this year, somewhat more than its earlier estimate of 1.4 to 2.4 percent growth for 2006.

The euro gained 0.9 percent on the US dollar to $1.2016, while it added 0.8 percent in relation to sterling, to £0.6862. The shared currency was also up in relation to several Scandinavian and Eastern European currencies, and it gained 1 percent to ¥139.60 versus the Japanese yen.

Tags: Exchange Rates News, Interest Rates News, ECB: European Central Bank News by Brian Turner
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In a move that was expected by most analysts, the European Central Bank raised its main refinancing rate on Thursday by a quarter point, to 2.5 percent. It was only the second time rates have been raised in the eurozone in five years. Interest rates are expected to rise by a further quarter or half point to 2.75 percent or 3 percent by the end of the year.

Today’s hike and those predicted to come are driven by improving economic data from the eurozone and an expected pressure toward inflation. The headline inflation rate was 2.4 percent in the year ending in January, above the ECB’s target of around 2 percent. The core interest rate, which excludes food and energy prices, was at 1.2 percent.

Another pressure to raise interest rates comes from the concern by some members of the ECB’s governing council that if interest rates continue to remain low, borrowing by households and businesses will continue to grow. New data shows that lending to individuals was up at an annual rate of 9.4 percent in the eurozone in January, the fastest growth since 2000. Business lending was also up. Property prices are also up, by 7.7 in the first half of last year, leading the ECB’s president to argue that a tight monetary policy might be necessary to control eurozone property prices.

Tags: Interest Rates News, ECB: European Central Bank News, European Economy News by Brian Turner
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In a move that was expected by most analysts, the European Central Bank raised its main refinancing rate on Thursday by a quarter point, to 2.5 percent. It was only the second time rates have been raised in the eurozone in five years. Interest rates are expected to rise by a further quarter or half point to 2.75 percent or 3 percent by the end of the year.

Today’s hike and those predicted to come are driven by improving economic data from the eurozone and an expected pressure toward inflation. The headline inflation rate was 2.4 percent in the year ending in January, above the ECB’s target of around 2 percent. The core interest rate, which excludes food and energy prices, was at 1.2 percent.

Another pressure to raise interest rates comes from the concern by some members of the ECB’s governing council that if interest rates continue to remain low, borrowing by households and businesses will continue to grow. New data shows that lending to individuals was up at an annual rate of 9.4 percent in the eurozone in January, the fastest growth since 2000. Business lending was also up. Property prices are also up, by 7.7 in the first half of last year, leading the ECB’s president to argue that a tight monetary policy might be necessary to control eurozone property prices.

Tags: Interest Rates News, ECB: European Central Bank News, European Economy News by Brian Turner
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