German bank: Continual increase in energy prices may weaken the Euro.

Antje Praefcke of Deutsche Bank warned in a report that the ongoing rise in energy prices caused by conflicts in the Middle East could harm economic growth in the Eurozone and weaken the Euro. She stated that Europe heavily relies on energy imports, so the impact of oil price shocks will further drag down the already sluggish growth. Rising energy prices combined with high inflation rates will be a highly unfavorable combination for the European Central Bank. She mentioned that the ECB may have to respond with higher interest rates to curb inflation, but if the economy suffers, this move will not provide support for the Euro. Data from the London Stock Exchange Group showed that the Euro rose 0.2% to $1.1638, after hitting a three-month low of $1.1528 earlier on Tuesday.