Around 9:30 p.m., the euro gained 0.10% against the greenback, to 1.0843 dollars per euro, and also appreciated by 0.10% against the pound, to 85.15 pence per euro.
The single currency benefited slightly from an acceleration in price increases greater than expected in the euro zone, removing the likelihood of two rate cuts in a row this summer while stable inflation in the United States finally strengthened the dollar. .
Around 7:30 p.m. GMT, the euro gained 0.10% against the greenback, to 1.0843 dollars per euro, and also appreciated by 0.10% against the pound, to 85.15 pence per euro.
The Dollar Index which measures the American currency against a basket of currencies lost 0.04% to 104.66 points after the publication of the PCE index in April in the United States which shows that the rise in prices remains at 2, 7% over one year, still far from the American central bank’s 2% objective.
In the euro zone, inflation accelerated in May, to 2.6% over one year, after 2.4% over one year in March and April. The consensus of analysts surveyed by Factset and Bloomberg expected a slighter acceleration, at 2.5%.
This renewed inflation, which can be explained by the rise in prices of services and energy, “will not prevent the European Central Bank (ECB) from reducing its interest rates next week”, during its meeting, “but a further decline in July now seems unlikely,” deduced Jack Allen-Reynolds, analyst at Capital Economics.
Forex traders still expect the ECB to announce a rate cut at its next monetary policy meeting on Thursday; but the possibility of two consecutive declines now seems out of the question.
To stem inflation, the ECB has increased borrowing costs at an unprecedented rate since July 2022. Its rates have been kept unchanged at a record level since October 2023, after ten increases in a row.
The increase in consumer prices in the euro zone has consequently slowed significantly, after peaking at 10.6% year-on-year in October 2022, when energy prices were soaring in the context of the war in Ukraine.
For its part, the yen fell heavily despite the latest interventions by the Japanese authorities to stem the weakening of the Japanese currency.
Around 7:30 p.m. GMT, the yen lost 0.30% against the greenback at 157.29 yen per dollar. The Japanese currency lost 0.41% against the euro at 170.56 yen per euro.
Japan has intervened in the foreign exchange market to the tune of around $62 billion since the end of April, the Japanese Ministry of Finance announced on Friday, confirming market speculation in this direction.
These Japanese interventions over the past month represented a total of 9,788.5 billion yen between April 26 and May 29, said the ministry, which announces these statistics each month.
Each time, the alleged intervention suddenly caused the Japanese currency to rise, but only temporarily, the yen remaining weakened by the accommodating monetary policy of the Bank of Japan (BoJ) while the other central banks are maintaining for the moment high interest rates.
