The Euro experienced little movement against the US Dollar following the earlier-than-scheduled publication of minutes from the FOMC’s latest policy meeting.
The minutes revealed that when it comes to the aggressive easing currently being implemented in the US, committee members are becoming increasingly divided. But the impact of the minutes was notably lessened as the policy meeting they detailed occurred before last week’s worse-than-anticipated US employment figures, which changed the state of play somewhat.
The Euro Exchange Rate was in the region of 1.3077 against the US Dollar as of 11:12 am
Fluctuations in the EUR/USD pairing were also minimal following the release of German CPI data. The consumer price report showed that German annual inflation rose 1.4 per cent last month following an increase of 1.5 per cent in February. The figures were in accordance with economist’s predictions, and the Euro recorded slight gains.
However, significant Euro movement could occur as a result of a two day meeting of EU finance ministers, beginning tomorrow.
At the informal Dublin gathering ministers will discuss several key issues, including Cyprus’ controversial bailout, the concerning situation in Slovenia and Germany’s resistance to planned banking reforms for the Eurozone.
Although the majority of details concerning the Cypriot aid package have already been finalised, Jutta Urpilainen, the Finnish Finance Minister, recently stated that ‘some details might still be changed on Friday’.
And as regards the banking union, there are plenty of issues to be ironed out and more than a little German reluctance to overcome.
As one EU official was quoted as saying: ‘The German’s have raised obstacles all the way along. Everyone is getting fed up with them.’
German officials are insisting that any hesitancy is the result of a determination to get the banking union right from the beginning.
The Euro could post gains against the US Dollar this afternoon if US initial jobless claims data adds to the growing concerns surrounding the labour market of the world’s largest economy.
Tomorrow’s industrial production figures for the Eurozone will also be of interest to investors. Economists have forecast that a decline of 2.5 per cent will follow last month’s drop of 1.3 per cent, but if the result is worse than predicted the Euro could dip against its rivals.
As of 13:39: The Euro hit a 6-week high against the US Dollar as a result of falling Italian and Spanish borrowing costs.
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