A surprisingly strong rise in the Ifo index resulted in slight gains in the euro. The European common currency was quoted 0.1 percent higher at 1.1935 dollars in the evening. The mood on the German executive floors, as reflected by the Ifo index, is as good as it was last in November 2018. At the same time, the subject of inflation is taking a back seat for investors.
The pound sterling was at the center of the forex market. The disappointment of those investors who had relied on tightening monetary policy weighed on the British currency. It was cheaper to 1.3892 dollars or 1.1640 euros. The Bank of England is keeping interest rates low despite the sharp rise in inflation. The monetary authorities around central bank chief Andrew Bailey left the key rate at 0.1 percent. In addition, the volume of the ongoing securities purchase program remains at £ 895 billion. Of this, 875 billion pounds will be spent on government bond purchases, 20 billion will be earmarked for corporate bonds. The outgoing chief economist Andy Haldane voted in vain to reduce government bond purchases to a volume of 825 billion pounds. Consumer prices on the island rose by an average of 2.1 percent year-on-year in May, which is the first time in almost two years that the central bank’s target of two percent was exceeded.
On the commodities market, oil prices continued to rise and were not higher than they had been since October 2018. A barrel (159 liters) of the European North Sea variety Brent cost $ 75.47 in evening trading. That was 0.4 percent more than the day before. The price of a barrel of the US West Texas Intermediate (WTI) rose to $ 73.25. The prices had already reached their highs on Wednesday. Support recently came from declining inventories from the USA.