Euro Recovers Versus US Dollar After German Finmin Schaeuble's Comments
Brussels (Aug 27) The euro erased its early losses against the US dollar in European deals on Wednesday, after German Finance Minister Wolfgang Schaeuble's remarks that the European Central Bank President Mario Draghi has been "over-interpreted" for his hints about possible quantitative easing at Jackson Hole symposium.
"I know Mario Draghi very well. I think he's being over-interpreted," Schaeuble told the regional daily Passauer Neue Presse in an interview.
Schaeuble noted that Draghi's comments were over interpreted by markets as shift of emphasis towards support for more fiscal stimulus.
At the Jackson Hole symposium last week, Draghi said that the ECB "will use all available instruments needed to ensure price stability over the medium term" should inflation deteriorate further.
German consumer sentiment is set to drop in September, according to a survey conducted by the market research group GfK.
The forward-looking consumer confidence index fell to 8.6 from a revised score of 8.9 in August, data showed Wednesday. The index was expected to drop marginally to 8.9 from August's initially estimated value of 9.
Data from the statistical office Destatis showed that Germany's import prices declined at a faster rate in July, more than the consensus estimate.
The import price index fell 1.7% year-over-year in July following the 1.2% drop in June. Economists had expected a 1.4% decline.
The euro held steady against the greenback, after recovering to 1.3188. This may be compared to an early near 1-year low of 1.3152. If the euro extends rise, 1.325 is seen as its next possible resistance level.
After falling to an 8-day low of 136.81 against the yen earlier, the euro rebounded and moved sideways during European deals. Further gains may take the euro to a resistance around the 137.5 zone.
On the flip side, the euro fell to a 2-week low of 0.7940 against the pound, while reaching 1.2068 against the Swiss franc, lowest since December 2012 . The euro may seek support around 1.20 against the franc and 0.79 against the pound.