The Euro fell against the US Dollar for the first time in three days after Germany’s top constitutional court asked the European Court of Justice to examine the European Central Bank’s outright monetary transactions programme on the grounds that the Bank may have exceeded its mandate.
The German court said that the OMT programme exceeded the ECB’s powers and broke rules set out by the Maastricht Treaty.
The German judges said; “In the view of the Senate there are important reasons to assume that OMT exceeds the European Central Bank’s monetary policy mandate and thus infringes on the powers of member states, and that it violates the prohibition of monetary financing of the budget. The violation would be manifest because primary law stipulates an explicit prohibition of monetary financing of the budget and thus unequivocally excludes such powers of the ECB.”
Investors widely ignore data released early in the session which showed that Germany’s trade surplus narrowed in December.
The Euro fell as the markets saw the dispute as a clear Euro negative.
The US Dollar looks likely to rise further later in the session as economists are forecasting that key US nonfarm payroll data will show that the jobs sector in the world’s largest economy strengthened in January. The report is expected to show that US employers added 180,000 new jobs. The overall US unemployment rate is likely to stay at 6.7%, the lowest level seen since 2008.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,US Dollar,1.3565 ,
Euro,,British Pound,0.8300 ,
Euro,,Australian Dollar,1.5162 ,