Euro Surges Above 1.09 as German Inflation Heats Up

Azeez Mustapha

Updated:

Unlock Daily Forex Signals

Select a Plan

£39

1 - month
Subscription

Select

£89

3 - month
Subscription

Select

£129

6 - month
Subscription

Select

£399

Lifetime
Subscription

Select

£50

Separate Swing Trading Group

Select

Or

Get VIP forex signals, VIP crypto signals, swing signals, and forex course free for lifetime.

Just open an account with one our affiliate broker and make a minimum deposit: 250 USD.

Email [email protected] with a screenshot of funds on account to get access!

Sponsored by

Sponsored Sponsored
Checkmark

Service for copy trading. Our Algo automatically opens and closes trades.

Checkmark

The L2T Algo provides highly profitable signals with minimal risk.

Checkmark

24/7 cryptocurrency trading. While you sleep, we trade.

Checkmark

10 minute setup with substantial advantages. The manual is provided with the purchase.

Checkmark

79% Success rate. Our outcomes will excite you.

Checkmark

Up to 70 trades per month. There are more than 5 pairs available.

Checkmark

Monthly subscriptions begin at £58.



The euro gained ground against the U.S. dollar on Thursday, breaking above the key 1.09 level and challenging this month’s high. The rally was driven by a combination of factors, including upbeat risk sentiment, a weaker greenback, and stronger-than-expected inflation data from Germany.

The main catalyst for the euro’s rise was the release of the German consumer price index (CPI) for March, which showed a faster increase in the cost of living than anticipated. The CPI rose by 0.8% month-on-month and 7.4% year-on-year, beating the consensus estimates of 0.7% and 7.3%, respectively.

The higher inflation rate in Germany, the largest economy in the eurozone, suggests that price pressures are building up in the region and may force the European Central Bank (ECB) to tighten its monetary policy more aggressively. The ECB has already hiked its benchmark interest rate twice this year, from -0.5% to -0.3%, and is expected to deliver more rate hikes in the coming months.

Euro Surges Above 1.09 as German Inflation Heats Up

Monetary Policy Divergence Favors Euro

The euro’s strength was also supported by the contrast between the ECB’s hawkish stance and the Federal Reserve’s dovish one. The Fed has kept its policy rate unchanged at near zero since March 2020, despite rising inflation and robust economic growth in the U.S. The Fed has also maintained its massive bond-buying program at $120 billion per month, signaling that it is not in a hurry to taper its stimulus.

The Fed’s cautious approach reflects its concern about the stability of the U.S. banking sector, which has been hit by a series of scandals and losses in recent months. The most notable case was the collapse of Archegos Capital Management, a family office that defaulted on margin calls from several major banks, causing billions of dollars in losses.

The divergence in monetary policy between the ECB and the Fed is likely to provide a tailwind for the euro against the U.S. dollar in the near term. However, other factors may limit the upside potential for the common currency, such as the slow pace of vaccination in Europe, the political uncertainty in Germany ahead of the September elections, and the potential for trade tensions with the U.S. over digital taxes and steel tariffs.

 

You can purchase Lucky Block here. Buy LBLOCK

  • Broker
  • Benefits
  • Min Deposit
  • Score
  • Visit Broker
  • Award-winning Cryptocurrency trading platform
  • $100 minimum deposit,
  • FCA & Cysec regulated
$100 Min Deposit
9.8
  • 20% welcome bonus of upto $10,000
  • Minimum deposit $100
  • Verify your account before the bonus is credited
$100 Min Deposit
9
  • Over 100 different financial products
  • Invest from as little as $10
  • Same-day withdrawal is possible
$250 Min Deposit
9.8
  • The Lowest Trading Costs
  • 50% Welcome Bonus
  • Award-winning 24 Hour Support
$50 Min Deposit
9
  • Fund Moneta Markets account with a minimum of $250
  • Opt in using the form to claim your 50% deposit bonus
$250 Min Deposit
9

Share with other traders!

Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.

Leave a Reply

Your email address will not be published. Required fields are marked *