In the Asian session on Thursday (April 6), EUR/USD fell to 1.0887, a drop of 0.13%. Institutional economists said strong growth in the services sector has now lifted the euro zone out of recession.
Spain and Italy provided a sizeable boost to euro zone growth in March, but it’s hard to imagine an expansion of this magnitude being sustainable. Moreover, while inflation has cooled from its peak, it remains elevated, especially across the service sector. Therefore, the case for further rate hikes is strong.
Recent comments from ECB officials suggest that most of the key policymakers agree to keep raising rates. At the same time, investors’ expectations for further interest rate hikes in the United States have been further reduced. Affected by this, the EUR/USD exchange rate continued to rise this week, quickly breaking through the 1.09 mark.
