Dollar gains dominated the European morning on Wednesday after Fed Dudley’s hawkish comments overnight

Dollar gains dominated the European morning on Wednesday after Fed Dudley’s hawkish comments overnight and the Euro dipped to below 1.0550 against the US currency, although rising German yields eased net selling pressure to some extent.

 

German consumer process rose 0.6% in February with the annual inflation rate rising to 2.2% from 1.9% previously and this was the highest rate for over four years.

 

With German unemployment continuing to decline, there will be expectations of higher wage settlements which could also unsettle the Bundesbank and increase pressure for a tighter monetary policy.