After the publication of the minutes of the last meeting of the European Central Bank, it becomes clear that the ECB will maintain its loose monetary policy for a while longer. That weakens the common currency.
The euro gave up some of its recent gains on Thursday. In view of the ongoing loose monetary policy of the European Central Bank (ECB), the common currency was quoted 0.2 percent lower at 1.1750 dollars. The monetary authorities held an intense debate about their new interest rate outlook at their latest interest rate meeting, as the minutes of the meeting show. The ECB wants to keep its key interest rates at the current level or an even lower level until it can be seen that inflation has reached two percent and then stays that way for the time being. On the bond markets, the yield on ten-year federal securities climbed from minus 0.417 to minus 0.401 percent.
South Korea’s currency, the won, also tended to be weaker. The country’s central bank was the first major economy in Asia to raise its key interest rate during the corona pandemic. However, Federal Reserve Chairman Lee Ju-yeol gave a rather cautious interest rate outlook. Monetary policy remains loose, stressed Lee. The course of monetary policy depends on the progress of the pandemic and the monetary policy of other central banks.
In the commodity markets, investors cashed in after the recent oil price hikes. The price of Brent crude oil from the North Sea fell by one percent to $ 71.60 per barrel. Previously, surprisingly lower US oil stocks and rising fuel consumption had driven oil prices. “Right now, US consumers seem to be shaking off the proliferation of the Delta variant,” commented the strategists at Capital Economics. “However, it is likely that we are near the peak of US demand, which will put a cap on oil prices.” Oil prices were also burdened by the appreciating dollar. The crude oil traded in the US currency therefore became somewhat more expensive for many investors, which dampened their demand.