ECB Weber Confirms Hawkish Bias for Euro

[DailyFx]

Things were relatively quiet on the European front as economic data was far and few between in the overnight and New York sessions.
Notably, Swiss industrial production made headlines as the report for the first quarter dropped more than consensus expectations.

Declining by 4.7 percent, the monthly assessment helped to drag the annualized figure lower, still supported at 7.3 percent for the month. The report was subsequently followed by reassuring comments from the Swiss National Bank?s Chairman Roth, stating that the "Swiss economy is competitive". However, the central bank head did note that initial concerns are arising due to the depreciation of the currency, likely to spur inflationary pressures as it props up prices for global imports. Notably, carry trade rhetoric was absent, helping to exacerbate franc softness on the day. The story was quite different in Europe. The Euro gained against the dollar and yen in the session following hawkish commentary by the European Central Bank?s Weber. Noting that risks to inflationary pressures remain to the upside, Weber noted that tighter monetary policy that may be implemented will not pose a danger to overall growth. The sentiment of higher consumer prices was echoed by ECB President Trichet as he spoke in Montreal, Canada. "The sudden emergence of fast growing economies in the global economy is exerting upward pressure on prices." The case for higher rates boosted speculation and the Euro, helping buyers beat the 1.3400 figure in the New York morning.