German central bank provides a boost for the Euro

The euro performed well yesterday on the back of comments made by the German central bank (the Bundesbank) regarding future interest rates. The bank opined that forward guidance from the European Central Bank does not rule out future increases in interest rates, which may be needed in order to counteract inflation. This, along with more optimistic economic projections from the Eurozone’s largest economy caused the single currency to strengthen against the majority of its peers. Today sees the release of German Producer Price index data, a key inflation indicator. Given yesterday’s comments the inflation data is likely to have a slightly magnified impact and may cause volatility should figures differ from expectations. Call your trader now to see if euro fortunes can continue to improve.