After the release of some hawkish comments from a European Central Bank official, the Euro rebounded slightly, bringing to the fore again the possibility that the Euro zone could see a Arise in interest rates sometime in the near future. Klaus Liebscher of the European Commercial Bank Governing Council, and the outgoing governor of the Central Bank of Austria, commented that there was “no room for complacency” as regards both high inflation and interest rates in the Euro zone.
However, these comments appear to contradict those made last Thursday by Jean-Claude Trichet, the European Central Bank President, who predicted that the outlook for growth within the Euro zone was “dire,” which lead market analysts to speculate that there was little chance of seeing an interest rate hike any time soon.
According to Thomson Reuters analyst, Peter Stoneham, the contradictory statements issued by ECB officials have generated significant volatility in the Euro versus the U.S. Dollar. The latest comments from Liebscher mitigated earlier substantial losses; on Thursday, the Euro reached a near 6-month low versus the U.S. Dollar, when it fell below $1.50.
In early trading (10:15 a.m. GMT), the Euro had seen some rebounding against the U.S. currency, at $1.5065, up from $1.4976 earlier in the day. The previous near-low was on February 26, when the Euro traded at $1.4908.