The euro continued its climb yesterday to test the 1.35 dollar cap that he no longer had reached since January 3, 2005. Later in the day, the single currency was displayed against 1,3473 dollar after 1,3429 dollar the previous day. She received a pic 1,3503 dollar during day. Technical analysis, a superior 1,3480 dollar closing price should push the euro up to 1,3560 and beyond, to 1,3665, the absolute record of 2004.
The publication of us figures indicating inflationary pressures the import prices increased by 1.7 in March instead of 0.8 expected by economists did not allow the dollar to resume colors. And the announcement by the European Central Bank of a status quo on its interest rate at 3.75 for refinancing rate, was not penalized the single currency. It must be said that this decision was expected. Investors have seen that confirmation of the scenario dominant, table on a rate hike at the meeting of the Committee on monetary policy of the ECB of the month of June. Jean-Claude Trichet, Governor of the ECB, said that he looks "nothing that can be used to change the expectations of the market for the month of June". Stating simply monitor very closely the evolution of inflation without mentioning the term of "vigilance", sign of an imminent screw Tower, it validates the scenario dominant markets of raising 25 refinance rate basis points, to 4 in June after a new status quo in May. So he added that the monetary policy of the ECB remains today accommodating. "Clearly, there is no shadow of a doubt that the ECB is moving towards a tower of extra screws, considers Martin van Vliet, at ING.". The majority of the members are probably convinced that with a dynamic of growth of the euro area showing few signs of weakening, monetary policy has more needs to be accommodating. "The Economist table on an additional recovery after June which would refinance rate to 4.25. But he does not see the European Central Bank to go further and adopt a restrictive policy, even if other experts are considering a rate to 4.50.
Never seen levels
This is not the theory favoured by Patrick Artus at Natixis. According to the Economist, beyond price stability, the ECB seeks to "avoid excessive growth of liquidity, credit and asset prices." However considers, on the one hand, that there is no risk of skidding inflationary insofar as real wages and labour costs increase very little today, where the appreciation of the euro reduced import and production prices and where the bargaining power of employees is weakened.
On the other hand, the rapid braking of household credit, since early 2006, should prompt the ECB not to raise rate above 4, even if credit to businesses continues to grow rapidly.
The orientation of the euro was also on the rise against other currencies, including those exposed to the practice of the "carry trade", which is to play on the differentials in interest rates between the currencies against those that offer lower yields. Also has the euro reached levels never seen since the yen and Swiss franc. The single currency is exchanged at 160,36 Yen later in the day, against 160,34 Yen the day before, and it was 1,6407 Swiss francs to 1 euro instead of 1,6385 franc the day before. The euro was also ground against the pound sterling, at 0,68147 British pound for 1 euro ( 0.38).
On the bond markets, the strengthening of the scenario of an increase in the rates for June in the euro area has led to a strain on long rates in Europe. The performance of the German Bund in 10 years is stretched by 4 basis points, 4.175, whereas the OAT French same maturity increased by 4 basis points to 4,238. The Bund to two years was 4,086, its highest level since June 2002.