By: Barbara Zigah
The Euro appears to be giving back the gains it made yesterday against the U.S. Dollar following the news of a Eurozone interest rate hike. As widely expected by markets and analysts alike, the ECB announced a .25% increase in their benchmark interest rates. Some analysts believe that the announcement fell short of signaling that more interest rate increases would be forthcoming, given the absence of the ECB buzz words, “strong vigilance.”
Today, the markets are setting their sights away from the Eurozone and over to the U.S., with the focus on labor data from the U.S. Department of Labor. Yesterday’s release of private sector data from ADP, which beat analysts’ expectations by a wide margin, suggests that today’s official data could signal a turning point in the U.S. labor market.
As reported at 3:20 p.m. (JST) in Tokyo, the Euro was trading lower against the greenback, at $1.4338, a decline of 0.2%, but well off yesterday’s low of $1.4220 which occurred prior to the rate hike announcement. The Euro also lost ground against the Australian Dollar, which saw gains as the risk-on trade flocked to the commodity-linked currencies; against the Aussie, the Euro slipped to AU$1.3304, a decline of 0.2%.