Euro: A dangerous rise against the Dollar
The
euro surged by 15% against the dollar, and even traded above the $ 1.38 ,
is due to its status as a " safe haven " acquired at the expense of
the dollar , which dropped due to the American crisis .
The euro hovered close to a two-year high against the dollar on Friday as German business morale sours and did little to dent bullish sentiment toward the euro zone common currency.
Traders continue to consider the euro their favorite anti-dollar trade amid expectations the Fed will continue its QE (quantitative easing) program well into the start of next year.
On the other hand, the dollar slipped towards a nine-month low against a basket of currencies on Monday, with investors increasingly confident in the fact that the Federal Reserve will stick to its ultra-loose monetary policy this week.
The Fed starts a two-day policy meeting on Tuesday and is widely expected to keep its bond-buying program unchanged at $85 billion per month and the central bank will not begin withdrawing that stimulus until March 2014.
Unilever , Philips, Renault and many other big names have been affected by strong Euro and weaker dollar.
The euro hovered close to a two-year high against the dollar on Friday as German business morale sours and did little to dent bullish sentiment toward the euro zone common currency.
Traders continue to consider the euro their favorite anti-dollar trade amid expectations the Fed will continue its QE (quantitative easing) program well into the start of next year.
On the other hand, the dollar slipped towards a nine-month low against a basket of currencies on Monday, with investors increasingly confident in the fact that the Federal Reserve will stick to its ultra-loose monetary policy this week.
The Fed starts a two-day policy meeting on Tuesday and is widely expected to keep its bond-buying program unchanged at $85 billion per month and the central bank will not begin withdrawing that stimulus until March 2014.
Unilever , Philips, Renault and many other big names have been affected by strong Euro and weaker dollar.
The
rise of the single currency also provokes a decrease in import prices ,
while supporting the purchasing power of households and thus domestic demand
and penalizes exports lose competitiveness. In an environment of low inflation
(1.1 % in September) expectations of higher prices, can trigger deflationary
gears. The ECB will remain attentive to its currency movements but will not
take the risk of lowering the value of a protected hard currency.
Now the US Dollar reaction will need to monitored up to the beginning of 2014 year, and it may be difficult for the European currency zone .
Now the US Dollar reaction will need to monitored up to the beginning of 2014 year, and it may be difficult for the European currency zone .
