Dollar surges due to a deteriorating euro

Dollar surges

The U.S. dollar was close to touch its nine-day highs against its opposing currencies including the euro. The European Central Bank hasn’t shown any indications of backing out a little from monetary easing.

The European currency edged down by 0.5 percent last night after a Reuters report showed  that European Central Bank law makers were worried on changing their policy messages after adjustments this March had elevated prospects of the central bank putting an end to its super easy policy.

The U.S. dollar rose by 0.3 percent at yen’s 111.385, this placed a space between their four-month decline of 110.110 last Monday, the euro plunged by 0.2 percent to $1.0745, while the pound climbed a little by 0.1 percent to $1.2450. HSBC predicts that the pound will drop to $1.10 by the end of this year.

However earlier this month, the euro was strengthened by a report that the ECB had talked the likelihood of an interest rate hike before its quantitative easing programme ends. Senior FX strategist at IG in Tokyo Junichi Ishikawa says the central bank looks like it’s ready to find its way out of its easy policy, just so it would be hard for the euro to keep dropping.

Sterling wobbled between $1.2478 and a slump of $1.2377 before closing with minimal changes last Wednesday. It was struggling to find direction from Britain’s official divorce from the EU. However some perceived a downside risks to sterling among future political problems and also the likelihood of Britain failing to reach a separation deal with the European Union.

In other currencies; the New Zealand dollar slid 0.2 percent to $0.7021 and the Aussie dollar edged down 0.1 percent to $0.7665.


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