The Euro soared to its highest level since 2011 against the US Dollar after the American currency received a kicking after economists said that the currency’s recent gains had been overdone and as a European Central Bank Governing council member warned that a lack of interest rate rises in the area will harm the Eurozone’s reforms.
Jens Weidmann told a German newspaper that low inflation should not be used to justify a looser monetary policy.
“We must take care to raise interest rates again in a timely manner should inflation pressures build, the Euro area is recovering only gradually from the most severe economic crisis in the post-war period; pricing risks are slight. That justifies low benchmark rates,” Weidmann said in his interview with the Bild newspaper.
The Euro was also supported by the banks adjusting their positions before the end of the year and the release of better-than-expected data releases in France, Spain and Greece.
The US Dollar was weakened earlier in the session after speculation rose that the Federal Reserve will not raise interest rates any time soon despite it choosing to reduce its monetary easing measures in the New Year.
Trading continues to be light due to the Christmas holidays; the next Eurozone relevant data is released next Monday where Spain and Ireland will release retail sales figures. Positive house price data for the UK on the same day is likely to see the Pound recover ground and possibly push higher.
Euro (EUR) Exchange Rates
As of 14:15 pm GMT
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3809
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8360
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.5499
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6879
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.4729
The Euro/ Japanese Yen Rate Exchange Rate is currently in the region of: 145.0065
The Euro/Swiss Franc Exchange Rate is currently in the region of: 1.2242
The Pound Sterling/ Euro Exchange Rate is currently in the region of: 1.1956
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7238
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.6447
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.5921
The Canadian Dollar/Euro Exchange Rate is currently in the region of: 0.6784
Swiss Franc/Euro Exchange Rate is currently in the region of: 0.8168