Currency news - US fears limit Euro selling

US fears limit Euro selling - 24-09-08

The dollar found support weaker than the 1.48 level on Tuesday and recovered back to 1.47 in European trading as oil prices partially reversed Monday’s strong gains.

The Belgian business confidence index dipped sharply which maintained fears over the German IFO index. The ECB has still maintained a tough public stance on inflation and monetary policy. A key issue for the ECB is that it is concerned over wage settlements with IG Metall continuing to push for an increase in the 7-8% range. Policy tensions are liable to build, however, with Spanish Finance Minister Solbes effectively calling for lower interest rates.

The German IFO business confidence index weakened to 92.9 in September from 94.8 previously and there were negative comments from the IFO officials with calls for lower interest rates. The data will certainly maintain fears over the Euro-zone economy, although a weak figure had been expected.

Tim Clayton
Investica Ltd
E-mail: tim.clayton@investica.co.uk
+44 (0) 1452 781001

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