FRANKFURT (dpa-AFX) – The euro exchange rate rose significantly above $ 1.09 on Thursday. After the euro, the common currency, had passed the mark for a short time in the middle of the week, it rose to a daily high of $ 1.0938 in the morning. The European Central Bank (ECB) had last set the reference rate on Wednesday afternoon at $ 1.0875 (Tuesday: 1.0840).
Market observers pointed to the recent fall in interest rates on US government bonds after market speculation intensified due to a cut in the key interest rate by the US Federal Reserve. This has burdened the dollar. Over the course of ten years, the yield on US government bonds has dropped to a new record low below 1.30 percent.
“The market is speculating on falling US interest rates because they can still fall,” said foreign exchange expert Thu Lan Nguyen from Commerzbank. The key interest rate in the US is currently between 1.50 percent and 1.75 percent. While interest rates had risen several times in the United States last year, they remained in the euro zone at the record low. “One cannot be sure whether the ECB can or wants to cut its interest rates even further,” commented the Commerzbank expert.
In general, the coronavirus crisis remains a dominant issue in the currency market. Recently, an escalation in the crisis had fueled safe investment ports, including the US dollar.
Later in the day, economic data could also provide new impulses for trading in the euro. The program includes late-morning data on corporate sentiment in the eurozone. The ECB President will also give a speech in the morning Christine Lagarde erwartet./jkr/jsl/zb
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