FRANKFURT (dpa-AFX) – The euro eased slightly on Tuesday. The European single currency was last trading at $1.1429. It had been quoted a bit higher in the morning. The price swings remained limited. The European Central Bank set the reference rate at $1.1433 (Monday: 1.1415). The dollar thus cost 0.8746 (0.8760).
Better-than-expected economic data out of Germany did little to move the market. Total production rose more than expected in May. Industrial orders had already surprised to the upside on Monday. “The hard data so far point to positive growth in the second quarter,” wrote Thomas Gitzel, chief economist at VP Bank. He also pointed to retail sales, which rose noticeably in May. “That suggests the German economy may have shown a measure of resilience in the second quarter against developments in the Middle East.”
The figures, however, did not provide the euro with any lasting lift. Since mid-June, the euro has been moving “between $1.135 and $1.145 and you slowly get the feeling this could continue for a while,” wrote Commerzbank currency expert Volkmar Baur in a commentary. “Because at least for the moment, no major drivers appear to be in sight. At least for the summer.”
Two central bank meetings are still on the calendar this month, but major impulses are not expected there either, Baur added. Market opinion does appear to be firming that the ECB will raise its key rate once more, but September looks more likely than July for that step. “And if you get the impression that the ECB will have little new to say, then that should apply even more to the Fed.” Fed chief Kevin Warsh has made clear in recent weeks that he will not say anything, and that is likely to remain the case. A clear signal is therefore not expected here either.
Against other major currencies, the ECB set the reference rates for one euro at £0.85411 (0.85538), ¥185.09 (185.31) and 0.9218 (0.9201) Swiss francs. A troy ounce of gold (about 31.1 grams) cost $4,153. That was about $11 less than the previous day./jsl/he
