Wed, Aug 30, 2017 - Page 11 News List

Euro surpasses US$1.20 for first time since 2015

AFP, LONDON

The euro yesterday topped US$1.20 for the first time in more than two-and-a-half years, as traders bet on the winding down of eurozone stimulus measures.

At 8:10am in London, the single currency touched US$1.2070, the highest level since early January 2015. That compared with US$1.1978 late on Monday in New York.

In hotly anticipated speeches late last week, central bank chiefs from the US and Europe sidestepped the questions of economic stimulus and monetary policy.

Meanwhile, European Central Bank President Mario Draghi expressed scant concern over the euro’s ongoing strength, dealers said.

“Draghi’s lack of concern about the euro’s recent rally provided the green light for a jump above the key US$1.20 level,” NFS Macro analyst Nick Stamenkovic told reporters.

“Positive sentiment looks set to persist,” he said, adding that recent eurozone data had sparked optimism over the “strengthening growth picture.”

At the same time, the greenback has been hampered by jitters over US President Donald Trump’s possible tax reforms and geopolitical fears after North Korea’s missile launch over Japan yesterday.

Sentiment was also dented in the wake of monster Hurricane Harvey in the US.

“The dollar continues to suffer from the Trump reality check,” Oanda Corp analyst Craig Erlam said. “His promises of spending and tax cuts [have] been a none-mover, weighing on the dollar because of the economic impact that will be lost and because it likely means less [interest] rate hikes from the [US] Federal Reserve.”

“Geopolitical tensions, troubles within the White House and [US] Congress and now Hurricane Harvey pile further pressure on the greenback,” Erlam added.

Harvey had on Friday last week crashed into Texas as a category four hurricane, tearing down homes and businesses on the Gulf Coast and triggering massive floods.

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