US Dollar Continues Gains on Euro

The US dollar climb against the euro has persisted this morning, in a trend that has now lasted for the past five days.

Currently the euro is buying EUR 1.11, having reached $1.15 after 6AM GMT.

The dollar has been boosted by impressive Production Price Index data released by the US Bureau of Labor Statistics.

For the third consecutive month, the Producer Price Index for final demand increased, in January by 0.1%.

The news was positive even though last month’s growth had eased, compared to the 0.2% recorded in December, and 0.4% in November.

In January, prices for final demand services advanced 0.5 percent, but the index for final demand goods declined 0.7 percent.

Analysts have viewed the data as another indicator, that fears were over the state of the US economy that was voiced earlier this year has allayed.

In comparison, , the euro has lost some of its attractiveness in being safe investment amid market turmoil.

This is mainly due to recovering stock markets, as the FTSE, DAX and the CAC have all made gains in the past four days.

More investors will be looking to make riskier investments, resulting in less demand to use the euro as a funding currency, as European Central Bank interest rates are low.

Against the UK pound, the euro is currently buying £0.777, a slight fall from a peak of £0.781 so far today GMT.

The UK pound has fallen against the euro in the past 24 hours, as uncertainly over the outcome of the UK’s negotiations with their European Union partners continues. And the prospect of the ‘Brexit’ still lingers over the value of sterling.

EU28 current account surplus EUR 11.7 billion

European Union (EU) member states have recorded a current account surplus of EUR 11.7 billion for December last year, according to Eurostat.

This was down compared to November in 2015, when an excess of EUR 13.5 was recorded.

Year on year, the latest figures were also not as positive, as the surplus for December 2014 was EUR 13.7 billion.

The surplus of the goods account also increased slightly in December, climbing up to EUR 8.3 billion, 0.1 billion higher then the figure for the previous month.

There was also encouraging news on then deficit on the primary income account, which fell by EUR 0.5 billion from EUR 2.5 billion.

Although the surplus of the service account also decreased by a significant account, declining from EUR 11.5 billion compared to EUR 14.3 billion in November.

In the euro area, Eurostat also released the latest figures on the balance of payments and euro indicators.

The current account balance reached EUR 25.5 billion in December last year, a reduction of EUR 1.4 billion month on month.

Figures for the balance in trade in services was the most influential reason why their was a regression.

This fell between November and December last year by EUR 1.4 billion, additionally the balance of trade in goods contracted by EUR 1 billion.

In contrast, the primary income balance increased by EUR 1 billion, while the balance of secondary income was slightly higher at minus EUR 11.2 billion in December, from EUR 11 billion the previous month.