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Euro to US Dollar (EUR/USD) Exchange Rate firms today as Weidmann eases inflation nerves

European Flags

The Euro made gains against the US Dollar on Thursday morning after investor jitters were put at ease over the release of Eurozone inflation data which came in below the European Central Banks target rate.

Concerns were initially raised following the report after a report showed that consumer prices rose at 0.8% on a yearly-on-year basis in December, down from the previous figure of 0.9% and further away from the ECB target of 2%. Investor jitters were eased however after the head of Germany’s Bundesbank and ECB policy maker Jens Weidman delivered a speech in Berlin.

Weidmann played down fears over the threat of deflation in the currency bloc. “In the current economic situation, the risk is of a broad deflation in the euro zone is limited,” he said.

He also responded to German criticism against Mario Draghi’s low interest rate policy by saying that it was currently appropriate. He nevertheless reminded that keeping rates low for too long could have negative implications for the economy.

“An ultra loose monetary policy is a therapy with risks and side effects. It cannot become permanent therapy,” Weidmann added.

The single currency found support from a report which showed that new-car sales in Europe surged to their highest level in almost four years, adding to signs that the region’s economy is improving. A Positive bond sale in Spain also bolstered the single currency.

All eyes will now be focussed on the afternoon’s release of the latest US jobless claims and US core inflation data. If both sets of data show improvement then we can expect the ‘Greenback’ to regain its lost ground and perhaps push higher against the Euro and other major peers.

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,1.3610 ,
Euro,,British Pound,0.8329 ,
Euro,,Australian Dollar,1.5492 ,
Euro,,Canadian Dollar,1.4886 ,

As of 08:55 GMT