WDH / Foreign Exchange: Euro exchange rate gives way – Powell speech hardly moves | 02/23/21

(In the 1st paragraph, 2nd sentence, an unnecessary letter has been removed.)

FRANKFURT (dpa-AFX) – The euro exchange rate gave way on Tuesday. The European common currency traded at $ 1.2151 in the afternoon. In the morning it had continued the previous day’s profits and had risen to $ 1.2180. The European Central Bank (ECB) set the reference rate at 1.2143 (Monday: 1.2133) dollars. The dollar cost 0.8235 (0.8242) euros.

Statements by US Federal Reserve Chairman Jerome Powell initially did not change the direction of the exchange rate. He confirmed recent statements. Accordingly, there is still a long way to go before the US economy has overcome the consequences of the corona crisis and achieved the goals of the central bank. The outlook has improved thanks to the vaccinations, Powell said. Fears of an overheating economy and rising inflation have recently increased. The fears are also fed by the US government’s planned stimulus package worth billions.

Powell doesn’t see these inflation threats, however. He points to the increased unemployment and the weakened recovery on the labor market. “The top US central banker remains true to his cautious line with a view to assessing the economic outlook,” commented Uwe Burkert, chief economist at LBBW. The advancing economic recovery should therefore not be threatened by changes in monetary policy for a long time to come.

The pound sterling rose significantly against all major currencies. The UK government plans to lift all restrictions on the coronavirus pandemic in England by June 21. “In the short term, the British currency is likely to continue to have the lead in the G10 comparison,” said Thu Lan Nguyen, foreign exchange expert at Commerzbank. However, it is questionable how much more appreciation the British central bank will tolerate.

For other major currencies, the ECB set the reference rates for one euro at 0.86308 (0.86530) British pounds, 127.98 (128.00) Japanese yen and 1.0946 (1.0888) Swiss francs. The troy ounce Gold (31.1 grams) was trading at $ 1808 in London that afternoon. That was about two dollars less than the previous day./jsl/jkr/he

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