Currencies: the yen continues to sink to a 35-year low
The dollar gained 0.1% against the euro (down to 1.0685), and +0.25% against the Swiss franc, but it was the yen that proved the most vulnerable, with -0.3% to 105.25, an annual low for almost 34 years, Japan's central bank seems unable to restore confidence in its currency, with its ultra-laxist monetary policy (interest rate at 0.1%) and an inflation rate above 2.6% in March, against a backdrop of wage increases close to 4% for 2024.
The Euro did not benefit from rising PMIs in the Eurozone, nor from Germany's Ifo business climate index: the latter rose from 87.9 in March to 89.4 in April, above the 89 expected by Capital Economics, with increases in both the expectations and current conditions sub-indices.
Germany took the opportunity to revise its GDP forecasts upwards.
Olaf Scholz is now forecasting growth of 0.3% this year (compared with +0.2% previously) and 1% in 2025, and Economy Minister Robert Habeck believes that inflation should slow to 2.4% in 2024, instead of the 28% anticipated last February.
But these expectations will not allay concerns about a resurgence in inflation, nor the uncertainty surrounding future rate cuts by the FED and ECB.
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