Greece Deadlock Continues While Euro Edges Higher
Financial experts report that Euro edges higher against the dollar on Tuesday, as data shows that the German confidence improved and reached a one year high this February. In the meantime, the deadlock between the euro zone and Greece continues.
The ZEW Centre for Economic Research announced an index of 53.0 of German economic sentiment, a rise by 4.6 points from January’s index of 48.4. This is the highest reading since February 2014, but it still hasn’t reached the expectation of 55.0.
The financial market experts expressed a rising sentiment as result of the unexpectedly strong rate of economic growth in the fourth quarter of 2014.
Following the data, the EUR/USD touched session highs of 1.1400, going up from the earlier 1.1385.
The single currency experienced muted gains following the breakdown in talks between the euro zone prime ministers and Greece discussing a new financial agreement for the country.
Greece already has a 240 billion Euro bailout that expires at the end of this month and the new Greek government already expressed the desire of not having it expanded. A six month extension for the bailout was proposed to the government on Monday, but it was drastically rejected after being called ‘’unacceptable’’.
A new extension can still be requested by Athens by Friday. Otherwise, the present bailout will expire on February 28 and the country will literally run out of money, which will trigger its exit from the euro zone.
The euro also rose to session highs against the Yen, with EUR/JPY up to 135.38 and it was also higher against sterling, the EUR/GBP reaching 0.7403.
Tuesday data also shows that the rate of inflation slowed in UK to a record low in January, as consequence of the falling oil prices.
The annual rate of consumer inflation was at 0.5% in December and only 0.3% in January. This was the slowest rate of inflation since records began in 1989.
ONS said that consumer prices fell 0.9% in January, compared to the expectations of dropping to only 0.8%.
However, there is bad news as well, as the core inflation rose 1.4% up from 1.3% in December.