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Foreign exchange: Euro temporarily below 1.21 US dollars – still below 1.10 francs

The exchange rate of the euro temporarily fell below 1.21 US dollars on Friday. A dollar strength put the common currency under pressure and temporarily pushed the rate down to 1.2093 dollars. In the afternoon, the euro rebounded somewhat, rising to $ 1.2122. The price was still about half a cent lower than in the early morning.

The euro also recovered slightly against the Swiss franc in the course of the afternoon. The common currency rose to 1.0987 after 1.0969 francs at noon, but it remains below the 1.10 franc mark. The day before, the euro was still at its peak at 1.1070 francs. The dollar made minimal ground against the Swiss franc in the afternoon and continued its gains. The US currency is now trading at 0.9065 after 0.9060 francs at noon.

Just before the weekend, the US currency gained in all other major currencies. As a world reserve currency, the dollar benefited from a gloomy mood on the stock markets, triggered by higher capital market interest rates in the USA. The background to this is the rising growth and inflation prospects in the United States as a result of the government’s stimulus package worth billions.

There was additional pressure from statements by ECB director Isabel Schnabel about the latest development in government bond yields. She said in the morning that a further easing of monetary policy to support the economy is possible if the recent sharp rise in yields should weigh on economic development. The central banker confirmed the latest statements.

Economic data, however, could hardly influence the foreign exchange market. In Spain, inflation fell sharply in February, while the inflation rate in France fell only slightly and remained clearly in positive territory. In the afternoon, data on price developments in the US were roughly as expected and also had little effect on the foreign exchange market.

For other major currencies, the ECB set the reference rates for one euro at 0.87053 (0.86408) British pounds, 128.83 (129.73) Japanese yen and 1.0986 (1.1076) Swiss francs. The troy ounce of gold (31.1 grams) was trading at $ 1731 in London that afternoon. That was about $ 39 less than the day before.