Euro spikes to three-month peak, as dollar dwindles on Fed easing

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Euro spikes to three-month peak, as dollar dwindles on Fed easing

On Monday, the 24th of 2019, the eurozone currency had reached its three-month peak against the American dollar, while bearish signs on US economy appears to be cemented following Fed’s signal of an imminent rate cut as early as next month.

So far, during the early European trading, euro had been gathering pace against Great Britain Pound alongside US Dollar and extending its last week’s’ rally by 0.15 percent to $1.1386, its highest level since March 22nd, while the American currency had been holding steady near its three-months low at 96.10 after tumbling heavily last week following Fed’s dovish statement, which had weighed on the American dollar and bolstered its European, British, Japanese and Swiss counterparts.

Nonetheless, referring to a possible negative interest rate policy ahead for eurozone, while EU policymakers had little to do with the rates, a senior currency strategist at Daiwa Securities, Yukio Ishizuki said, “It is true that the ECB may have to ease policy especially with the Fed having shifted to an easing bias.

But the ECB already employs a negative interest rate policy and does not have much further room to ease even if they wanted to, unlike the Fed. It is factors like these which have seemingly supported the euro”. Apart from that, safe haven currencies such as Yen and Franc, demand of which usually grow substantially in times of political angsts, had been holding on steadily after adding massive gains last week.