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Tuesday 17 June 2008 à 09:21 AM
From high European inflation to the imminent increase of the rates of the ECB, pressure of G8, the “no” from Ireland and speculations about the change of American monetary policy, the Euro and the dollar were pulled on Monday by contradictory strengths.
The inflation in Euro-zone indeed reached a new record in May, at 3,7 % over one year, its highest level since the creation of this zone in 1999, according to the second estimation of the European Office of the Statistics which may lead to a next increase of the rates of the ECB.
«The ECB is certainly going to increase its rates from 4 % to 4,25 % during the meeting of July ", commented Howard Archer from Global Insight.
The euro and the dollar were pulled on Monday by contradictory strengths.
From high European inflation to the imminent increase of the rates of the ECB, pressure of G8, the “no” from Ireland and speculations about the change of American monetary policy, the Euro and the dollar were pulled on Monday by contradictory strengths.
The inflation in Euro-zone indeed reached a new record in May, at 3,7 % over one year, its highest level since the creation of this zone in 1999, according to the second estimation of the European Office of the Statistics which may lead to a next increase of the rates of the ECB.
«The ECB is certainly going to increase its rates from 4 % to 4,25 % during the meeting of July ", commented Howard Archer from Global Insight.
«It is not excluded that we decide to move on our rates in the next meeting ", had warned at the beginning of June the president of the ECB Jean-Claude Trichet.
In the difficult equation that the central banks have to resolve, to re-launch the growth and cut the inflationary tensions, this last hypothesis is at present privileged.
The FED multiplied these last two weeks warnings on a possible increase of the rates, to avoid a too strong depreciation of the dollar.
The figures of the inflation in the United States, confirmed on Friday the fears of acceleration of inflation in May, compared with last month.
The favourable atmosphere to a return of the strong dollar during the meeting of G8 last Friday and Saturday in Japan had also penalized the Euro.
Most of Finance Ministers of the G8 demanded a strong dollar. "A strong dollar is favourable to our nation ", the American secretary of the Treasury Henry Paulson notably repeated.
Finally, the “no” from Ireland to the treaty of Lisbon does not play in favour of the Euro. The subject " will be discussed by the European Ministers today but a fast resolution will not be found before the summit of Thursday, with discussions about a two-speed integration which will put the Euro in a weak position ", commented the analysts of Commerzbank.