2024 - Euro steady after week of strong gains

Writing
with AFP

05/27/2022 at 09:10 PMUpdated 05/27/2022 at 8:55 PM

The euro remained stable against the US dollar on Friday, benefiting over the week from the prospect of a tightening of monetary policy by the European Central Bank (ECB) which allowed it to reach a peak in a month.

Around 6:30 p.m. GMT, the euro remained stable (-0.03% to 1.0722 dollars) after climbing to 1.0765 dollars, a peak since the end of April. “End of month flows could have lifted the dollar slightly at least for the week, but ultimately the absence of significant demand for the greenback will leave the Dollar index in the red for the second week in a row,” said Scotiabank’s Shaun Osborne. The Dollar index, which measures the value of the dollar against a basket of other major currencies, dropped 0.06% to 101.76 points.

“We continue to believe that the best of the dollar’s push is now behind us and while it may not fall sharply, further gains appear unlikely unless there is another significant shock,” continued the analyst. “Fed action is fully priced in and rate hike expectations could be revised down if the (US) economy weakens faster than expected” , he added. The minutes of the last Fed meeting revealed in particular that the hypothesis of a 0.75 percentage point increase in key rates was not currently considered.

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