After dipping following the release of disappointing employment data for the Eurozone, the Euro was able to recoup losses as news emerged from the first day of an EU leader’s summit in Brussels.
The Euro Exchange Rate was in the region of 1.3058 against the US Dollar as of 10:48 am GMT
In light of the currency bloc’s recession woes and extensive unemployment issues EU leaders have backed ‘structural’ budgetary assessments, a means of giving struggling nations longer to reduce deficits.
French President Francois Hollande said of the development: ‘If there is too much austerity, there will be too much unemployment. Flexibility is necessary if we want to make growth the priority.’
Meanwhile, Luxembourg Prime Minister Jean Claude Juncker asserted: ‘I’m in favour of consolidation, but the budgetary adjustment measures we take shouldn’t pose a risk to growth. There should be a certain intellectual and practical flexibility.’
As a result of this news the Euro climbed on several of its main currency rivals, but gains were limited as investors braced themselves for today’s release of Eurozone CPI data for February.
However, in a report compiled by Eurostat annual consumer-price growth was shown to have slowed to the 1.8 per cent expected by economists. The Euro posted modest gains against the US Dollar following the data release.
As economist Jens Kramer asserted: ‘Inflation isn’t a severe risk to the economic situation, neither in Germany not in the Eurozone as a whole. It is very comfortable for the ECB to see inflation rates come down for their argument to stick to very low interest rates.’
In other news, Spain’s public sector debt leapt by 20 per cent in 2012 while Romano Prodi, Italy’s former Prime Minister, remarked that the Euro was too high. During a televised interview for Bloomberg Prodi stated: ‘The Euro has a very high rate of Exchange. I do think that it’s stronger than needed.’
With the end of the EU summit imminent the Euro could experience additional movement in the hours ahead.
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