[ 2015-01-05 ]

Euro hits nine-year low as dollar marches higher
The rising US dollar pushed the euro to a
nine-year low on Monday, as investors predicted
monetary easing from the European Central Bank and
reacted to a disputed report saying Germany was
preparing to allow Greece to quit the currency
bloc.

The dollar strengthened against all major
currencies except the Japanese yen, taking the
dollar index to its highest in nine years. The
euro was among the biggest movers, falling as much
as 1.2 per cent against the dollar to $1.1864 —
its weakest level since March 2006 — before
narrowing the decline to $1.1962.

The stronger US currency also nudged oil prices to
fresh multi-year lows, with WTI crude dropping as
low as $51.50 per barrel while Brent crude fell to
$55.38 during the Asian morning.

“This is still very much a dollar story here,”
said Mitul Kotecha, currency strategist at
Barclays. “We are still in a strong-dollar
environment going into this year, but the euro
downtrend is leading the way.”

The common currency had already fallen 0.8 per
cent to a four-and-a-half-year low on Friday after
ECB governor Mario Draghi warned that the risk of
the central bank failing to fulfil its mandate of
price stability was “higher than it was six
months ago.” Investors took the comments as a
strong hint that the ECB could unveil new easing
measures at its January 22 meeting.

Source - FT

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