The euro moved to well above parity with the US dollar yesterday, hitting its highest rate since mid August. It moved in the opposite direction against the pound, however, weakening by well over 1%.
It’s been a quiet week for data in the eurozone, but this morning we’ve had German inflation confirmed at 10.4%, its highest rate for many decades.
The general view in the markets appears to be that the ECB will be maintaining its hawkish stance on interest rates, despite criticism from some of Europe’s political leaders. Italy’s Giorgia Meloni and France’s Emmanuel Macron have both warned against central banks destroying demand, while ECB president Christine Lagarde has maintained that interest rates must continue to rise until underlying inflation has peaked.
EUR/USD over the past year
