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Global Economy

Euro climbs to highest level since early July

The euro rose to its highest level since early July on Wednesday after the release of US consumer price data.

In the afternoon, the shared currency traded at $1.0345. In the morning it was just over $1.02. The European Central Bank set the reference rate at 1.0252 (Tuesday: 1.0234) dollars. The dollar thus cost 0.9754 (0.9771) euros.

The surprisingly significant fall in the US inflation rate weighed on the dollar against all major currencies. Inflation slowed to 8.5 percent in July, according to the Labor Department. In June, inflation in the world's largest economy was still 9.1 percent, the highest level in over 40 years. Economists had expected inflation to fall, but had on average assumed a slightly higher rate of 8.7 percent.

"Inflation has probably peaked," commented economists at Commerzbank. However, the slump in the price of petrol is playing a decisive role. "The further decline in the inflation rate is therefore likely to be slow," say the experts. The US Federal Reserve is therefore likely to raise interest rates again by 0.75 percentage points at the next meeting. Commerzbank writes that the Fed initially wants to see a few months in a row with noticeably falling inflation rates. The Fed is aiming for an inflation rate of just 2 percent.

For other important currencies, the ECB set the reference rates for one euro at 0.84608 (0.84520) British pounds, 138.16 (138.26) Japanese yen and 0.9713 (0.9763) Swiss francs. An ounce of gold was trading at $1,799 in London this afternoon. That was about five dollars more than the day before. © dpa

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