/24-7PressRelease/ - London, UK, May 30, 2008 - Rising oil prices and strong performance by the European economies have pushed up Euro against the dollar.
Helped by swathes of investment and rising consumer demands, the German economy grew at the rate of 1.5 percent in the first quarter of this year. It in fact is the strongest performance since 1996. The performance acquires greater importance against the background of global credit crunch, slump in the US economy and the furiously rising costs of the economy.
"It is self feeding," Hans Redeker, BNP Paribas' global head of 'foreign exchange strategy', told in London, "The European Central Bank is getting more concerned about the effects of higher oil prices as the prices respond to a weakening U.S. dollar. As this happens the dollar weakens more,".adding later, "When the economic indicators (in Europe) are weakening you'd expect the correlation between Euro/dollar and oil to weaken as well, but for now that is not the case."
Starting from the end of April to the early part of May, the Euro showed a slump in its value against the dollar. But after that the currency showed a marvelous recovery to first break the impressive figure of $1.57 to reach the all time high of $1.60 last month. Helped with the stronger performance by the continental economy, the ECB can move ahead on bold economic measures to fight off the demands of curtailing the affects of rising inflation pushed up by the growing oil prices.
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