RTTNews - The euro saw strength against most major rivals Wednesday in New York on improved risk appeal. Meanwhile, data indicating German producer prices dropped at a record pace in July increased hopes the European Central Bank could raise rates without inflation concerns.
The German producer price index plunged 7.8% year-on-year in July, worse than a 4.6% decline in the preceding month, the Federal Statistical Office said. This was the lowest annual rate since the series started in 1949. Economists had expected a decrease of 6.5%. The PPI had grown 8.2% in the same month a year ago.
Meanwhile, ECB Governing Council member Axel Weber said the 0.3% growth in German gross domestic product in the second quarter is due to government stimulus measures and loose monetary policy.
In an article in the German weekly Die Zeit, Weber, who also heads Bundesbank, wrote that it is too early to declare that the recovery is sustainable.
The European Central Bank report showed that the Eurozone current account balance on an adjusted basis showed a deficit of EUR 5.3 billion in June, much larger than the revised EUR 0.1 billion deficit seen in May.
The Eurostat said that Eurozone construction output dropped a seasonally adjusted 1.1% % month-on-month in June after falling 2% in May. On an annual basis, the construction production decreased 8.8% in June, compared with a 7.6% fall in May, revised from 8% fall reported initially.
The euro rose to a five-day high against the U.S. dollar, reaching 1.4265. The 16-member currency had hit an August low of 1.4048 earlier in the week.
The euro climbed off of an eight-day low against the British pound. The European currency rose to 0.8615 after reaching as low as 0.8522 yesterday.
Consumer spending in the UK continued to stabilize in the period between late June 2009 and late July 2009 and housing market activity has been recovering, the Bank of England's latest agents' summary of business conditions revealed Wednesday.
The European currency moved mildly higher against the Japanese yen, reaching 133.80. The euro had dropped to a four-week low of 132.16 on Tuesday.
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