FRANKFURT (dpa-AFX) - The euro remained unchanged in early trading on Friday. The single currency was last quoted at 1.1777 dollars, holding steady at Wednesday evening's levels. The European Central Bank had set the reference rate on Thursday at 1.1782 dollars (Wednesday: 1.1780).
Financial markets are currently being driven by news regarding the conflict in the Middle East. Market participants are currently betting on a lasting peace settlement and also on the expectation that the Strait of Hormuz will soon be navigable again, according to analysts at Landesbank Hessen-Thüringen (Helaba).
While oil and gas prices remain elevated, overall risk appetite has increased. Experts point to receding concerns over inflation and interest rates.
In the wake of the Iranian conflict, the euro had initially dropped to as low as 1.14 dollars at times, but has since recovered from those losses since the end of March and is now trading almost back at the levels seen before the Middle East conflict. However, the momentum of this recovery has recently slowed.
Helaba experts attribute this to the fact that several ECB officials have recently spoken out against a rapid hike in key interest rates. Nevertheless, the technical outlook remains "constructive," with resistance levels unchanged at 1.1825 and around 1.1920.
Commerzbank analysts expect that interest rate expectations are likely to increasingly dictate exchange rate movements in the coming weeks. On the economic front, Friday's calendar is light. The EU is set to release its trade balance for February, while no economic data is scheduled for release in the United States on Friday./nas/zb
