Steep Improvement Of The Single Currency
The Euro/Dollar pair has increased 0.73% to trade at 1.2119 on the news that negotiation between Angela Merkel and Social Democratic Party saw some progress, but this was just a beginning and further developments in the government forming are yet to be revealed next week. French Final Consumer Price Index rose to the four-month maximum of 0.3%. The US is about to announce Consumer Price Index and retail sales.
The single currency is reinforced by ECB December meeting protocol, which indicated that members are ready for some policy tightening. They acknowledged positive improvement of the Eurozone economy. Should we expect some policy tightening from the Bank? The last time it raised the rate was almost seven years ago. The rate hike becomes more likely, considering the fact that starting from the next month, ECB will lower its asset purchase program. Many policymakers are convinced it should be ended for good and not expanded till September, as initially planned.