German inflation remains stubbornly high, despite flagging economic activity, in the economy. Germany is in danger of a potential de-industrialisation, which can only harm the Eurozone, as a whole. The ECB has acted conservatively in their interest rate policy, but they may be forced to act ‘further and longer’ with rate rises. Inflation had been falling steadily in many EU Countries, but those precipitous falls, appear to have been arrested, with inflation rises in Germany, France and elsewhere in the Zone. The cross rate is likely to suffer accordingly.
Current Level: .5975
Last week’s range: .5955 – .5995