Euro up slightly on positive economic reports

Published: 15 Aug at 12 PM Tags: Euro, Dollar,

Data indicating that the eurozone emerged from recession during the second quarter of the year has had little effect on the euro. The single currency remained steady against the dollar after an initial jump. The dollar remains relatively strong because of growing expectations that the US Federal Reserve will scale back its easy money policy, possibly as early as September.

The weakness of the euro is not indicative of any problems in the eurozone, but a reaction to the dollar’s strength ahead of a tapering by the Fed. The euro is currently trading at $1.3258 after hitting a high of $1.3278.

Both France and Germany have recorded positive growth, something that has helped the eurozone to emerge from the contraction experienced in the six previous quarters. Analysts now believe that Europe could enter a period of fragile growth.

However, some countries are still struggling with their economies, something that is likely to keep interest rates low at the European Central Bank.

The dollar has fallen against the pound with sterling rising by 0.6 per cent. Better economic data coming out of the UK has led some to speculate that the Bank of England could push up interest rates. The dollar was also down 0.1 per cent against the yen at 98.18.