Euro pressured by Spain’s crisis, United States dollar inches away from last week’s highs

European Markets

Monday, the euro settled at $1.1614 which was 0.1% higher from Friday’s three-month low of $1.1574, as well as losing 1.6% for the week which was considered as the single currency’s weakest in 11 months. While the United States dollar eases from its positive rally last week and ended up hovering near last week’s highs.

According to the dollar index, the greenback dropped 0.2% and settled at 94.775 which was just an inch away from last week’s three-month high of 95.150.

In accordance with the euro’s stance, former Catalonian President: Carles Puigdemont called for a peaceful democratic opposition on Saturday, to the central government’s takeover of the region which follows its anonymous declaration of independence from Spain. In addition, ECB announced on Thursday that the bank will extend its bond purchases until September 2018, as they ECB is reducing its monthly purchases to 30 billion euro beginning this January. Which led analysts and investors speculate that the ECB would not begin raising rates until 2019.

Masafumi Yamamoto, chief Forex strategist at Mizuho Securities, claimed that the European Central Bank wanted to keep its accommodative policy longer, in doing so, the central bank would soon achieve its inflation goal. He also added that the latest fall in the stance of the single currency was expected, and is anticipated to continue for a while.

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