NEW YORK (dpa-AFX) – The price of the euro held above $ 1.11 in US trade on Tuesday. The single currency was last traded at $ 1.1128. In early European business, the price was still at $ 1.1140.
Price movements were kept within comparatively narrow limits, market observers spoke of low-impulse trading. The European Central Bank set the reference price at $ 1.1115 (Monday: 1.1126). The dollar thus cost 0.8997 (0.8988) euros.
Data on price developments in the US could not give retail a new direction. In December, inflation in the world‘s largest economy rose to 2.3 percent, the highest level in about a year. According to the expert Bernd Krampen from NordLB, a significant increase in energy prices is responsible for the higher inflation. A further rise in inflation is expected in the winter months, before inflation is likely to weaken again in spring to the Fed’s target of two percent.
“These expected price trends should initially be unproblematic for the US central bankers,” said Krampen. In addition, the US Federal Reserve said the importance of the current economic downturn in the US was significantly higher.
By contrast, the yuan posted gains. China‘s currency benefited from the US government’s decision to stop branding the People’s Republic as a currency manipulator. Solid foreign trade data from China for December also provided a boost. The yuan rose to its highest level since last summer against the US dollar