Euro sees Gains against U.S. Dollar
The Euro was able to reverse earlier losses against the U.S. Dollar which saw across-the board-losses in Wednesday trading. The cause was generally thought to be investor concerns over the continuing deteriorating American economy, and the expectations that U.S. interest rates will remain at their lowest level in recent history.
Despite the Euro’s earlier gains, it remained vulnerable; recently released data raised the prospects that the ECB would need to reduce interest rates yet again, while the economies in the Euro zone continue to weaken, and inflation eases.
Euro zone data on producer prices indicated a sharp drop in November figures, a record decline attributed to the plunge in the cost of energy. In other recent data, the rise in consumer prices within the Euro zone was less than earlier expected and German unemployment figures also showed a larger rise than had been expected. Combined, all of these are indicators to economists and investors alike that easing of the monetary policy by the ECB is imminent and expected to be sustained.
At 11:59 GMT, the Euro gained .8%, trading at $1.3616 versus the U.S. Dollar. Versus the Pound Sterling, the Euro was able to win back some earlier losses and traded at 91.75 Pence.