The Euro has strengthened against the Pound and made gains against the US Dollar after the latest Consumer Price Index data for Germany beat economist expectations adding further weight to the view that the Eurozone’s biggest economy is making a recovery.
The preliminary inflation figures for June showed an annual increment of 1.8%, surpassing market forecasts at 1.7% and higher than May’s 1.5% advance. On a monthly basis, consumer prices rose 0.1%, above the median at 0.0% and lower than the previous level of 0.4%. The data combined with improved retail sales released earlier in the day.
“On the basis of sound fundamentals such as the resilient labor market, rising wages and low inflation, German consumers have become more confident,” said Christian Schulz an economist at Berenberg Bank. “Robust domestic demand, of which consumption is an important part, may prove to be crucial for gross domestic product growth this year.”
Adding to the single currency’s support was the news that European Union leaders have confirmed that they want an agreement by the end of the year on a way to sort out failing banks at a European level instead of a national one, paving the way towards a European banking union.
EU finance ministers agreed to take steps towards a union which would involve tighter oversight and coordinated resolution to any Banking crisis. The move could end years of taxpayers having to fund bailouts.
Since the start of the crisis in 2008 the EU has spent a third of its economic output on bailing out banks.
Standing in the way of a march towards banking union was German Chancellor Angela Merkel who told a press conference that treaty changes will be needed before any union can take place.
“Germany has made clear that under the current treaties the Commission does not have the competence to run such a central authority or act as a resolution body. If we want new competencies then they must be linked to treaty changes,” Merkel said.
Her words will be of interest to the British who are seeking to repatriate powers away from Brussels and any treaty change could allow that to happen.
Current Euro (EUR) Exchange Rates
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3065
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8571
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4197
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6828
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7660
The Pound Sterling /Euro Exchange Rate is currently in the region of: 1.1679
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.7084
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.5976
(Correct as of 14:30 pm GMT)