The euro jumped back above parity with the dollar this morning following a weaker session on Wall St and increased hopes of an ECB rate reduction tomorrow Early this morning, the euro was trading at US1.0014, having surged by 0.50pc overnight The single currency firmed after ECB president Wim Duisenberg said there was growing evidence of easing inflationary pressures in the eurozone. "The evidence has strengthened that inflationary pressures are easing somewhat and downside risks to economic growth have not vanished," he told the Economic and Monetary Affairs Committee of the EU Parliament
"This is about as clear as it gets in terms of a central bank signalling an intention to cut rates, particularly in the case of the ECB which is keen to improve its communication with financial markets," said Michael Crowley, economist at Bank of Ireland "However, we are still not much the wiser on the issue of whether it will be a 0.25pc or 0.50pc, though on balance we tend to favour the latter," he added Earlier this morning, Germany's Federal Statistics Office reported that retail sales fell 0.7pc in October from September and were down a real 1.1pc year-on-year. //www.fxcentre.com