Euro stood stronger against the U.S. dollar and the Japanese yen on Forex market after the Business Climate Index for January 2008 in Germany was released by the Ifo Institute for Economic Research today.
The European Central Bank council member and the governor of the Bank of Italy, Mario Draghi said yesterday that the monetary policy should be tightened in case the inflation in Eurozone will start to cross the target borders.
France’s European Affairs Minister Jean-Pierre Jouyet said today in St. Julians, Malta, at the press-conference devoted to the euro’s introduction to Malta, that the European economy can’t cope with the current exchange rates of the European currency against its major foreign counterparts - yuan, yen and dollar.
Both central banks decided their monetary policy changes today regarding their main interest rates. Both Bank of England and European Central Bank left their interest rates unchanged - 5.50% and 4.00% respectively as the majority of the market experts were predicting.
The Central Bank of Sudan announced through circular (sent to Sudanese banks last Thursday) that starting from 2008 it will be denominating all currency accounting in euro instead of U.S. dollar.
Today euro reached a new record high value against the Great Britain pound after the real estate market of the United Kingdom brought even more negative news thus increasing the chances for the Bank of England to cut the interest rate in January or February 2008.
The median U.S. dollar gain versus euro, estimated by the foreign exchange market experts for the next year, is 3.5%. The dollar is believed to gain strength in 2008 after two years of a pretty fast decline and hitting the historical minimums against several major world currencies.
The euro rose against all other major currencies today spurred by the carry trading optimism and weakness experienced by the Great Britain pound and the U.S. dollar.
European Central Bank published its scheduled Monetary policy decisions today, leaving the main refinancing operations interest rate at 4.00%. Jean-Claude Trichet, Central Bank President, commented this decision saying that ECB is ready to fight the pressure of the rising inflation.
October consumer prices inflation report added some new troubles for ECB to worry about as the released 2.6% CPI growth last month exceeded ECB’s target of 2.0%, while the economy growth is not performing at the pace that would allow another rate hike soon.