By: Barbara Zigah
The common currency rebounded close to a 2-month peak against the U.S. Dollar in Asian trading following news that Eurozone inflation levels surged, with speculation that the European Central Bank might move to raise interest rates sooner than later. Some analysts suggest that, at least in the short term, the Euro may be able to add to these gains if Jean-Claude Trichet, the ECB President, takes a firm stance on the rising inflation at the press conference to be held after this Thursday’s policymaker meeting. For the time being, investor concern over the growing turmoil in Egypt has diminished somewhat.
As reported at 1:37 p.m. (SGT) in Singapore, the Euro was trading against the greenback at 1.3722, a .2% gain from late Monday trading in the U.S. Some investors speculate that the common currency may rise as high as $1.40 provided, however, that the Egyptian political problems do not have a spill-over effect.
Other analysts are not certain that the rally that the Euro is currently undergoing will linger for much longer. One strategist in Singapore believes that the sovereign debt issues that remain unresolved in the Eurozone will rear up again, and is forecasting that the Euro may topple as low as $1.25 by April’s end.