EU Inflation, US Unemployment
Fri, Jun 6 2008, 16:38 GMT
by Andrei Pehar
If you are wondering what is driving the recent EUR/USD rally,
here are a few fundamental factors to keep in mind:
While both the Bank of England and the European Central Bank voted to hold
rates steady this week (5.0% for the UK, 4.0% for the EU), the ECB's President
Jean-Claude Trichet definitely had some hawkish overtones to his speech
yesterday, hinting at growing concern over inflation in the Eurozone and
possible future rate hikes, perhaps even as soon as next month.
Ben Bernanke, Trichet's counterpart in the US Federal Reserve, also hinted at
inflationary concerns in speeches this week, however the US Dollar is currently
being hit with rising oil prices, a dropping Dow, and unemployment which grew
by half a percentage point (largest gain since the early 1970's) to 5.5%.
