The Euro fell against the majority of its most traded peers on Wednesday after French Prime Minister Manuel Valls called for the European Central Bank to weaken the ‘overvalued Euro’ at tomorrow’s policy meeting.
Against the Pound the Euro fell further to a fresh 21-month low, against the US Dollar it dropped away from a six-week high and against the Canadian Dollar it was close to weakest level of 2014 so far.
The single currency was weighed upon by the release of a report which showed that the region’s producer price inflation fell last month and as calls for the ECB to take action to weaken the currency grew louder.
The ‘Greenback’ made gains after a report showed that US private sector employers created the most jobs since November 2012 as the world’s largest economy continues to shake off the negative effects of the winters harsh weather. The data showed that an extra 281,000 jobs were created last month, beating forecasts for an expected rise of 205,000.
The upbeat data eased market concerns over the outlook for the U.S. recovery caused by the publication of last week’s data which showed a sharp economic contraction in the first quarter fuelled expectations that the Federal Reserve would keep rates on hold for an extended period.
The Euro was also weakened after French PM Manuel Valls told the Les Echos daily newspaper in an interview that he wants the ECB to take action to weaken the single currency. The French government has persistently blamed the high value of the currency for France’s economic woes.
“The Euro is overvalued, which is bad for our industry and for growth. Regarding the ECB’s recent rate cut and introduction of a negative deposit rate they’re a strong signal but my idea of central bank is one that could go further, including by buying assets on the markets. Monetary policy cannot only go through interest rate moves,” Valls said in the interview.
Economists are widely forecasting that the ECB will not take any further action regarding interest rate cuts or the introduction of new monetary policy measures.
Also due for release tomorrow are the latest EU retail sales and Services and Composite PMI data reports.
Euro Exchange Rate News:
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