Dollar closer to euro parity

The euro extended its losses against the greenback on Friday as it traded under $ 1.05.

The euro zone currency dropped nearly 1.50 percent to $ 1.0462, a fresh 12-year low. It last traded at $ 1.04805 against the greenback.

Dollar-buying momentum lifted the greenback against its major rivals on Friday, overcoming disappointing U.S. inflation and consumer sentiment data that would normally weaken it. The dollar index rose to a fresh 12-year high of 100.39. Positioning ahead of the Federal Reserve’s monetary policy meeting next week was also seen as a potential reason for the seemingly incongruous move up by the dollar, analysts said.

“This was a fairly sudden move up in the dollar … The data are conflicting with PPI soft but the U.Mich inflation data is relatively strong. But this isn’t so much about the data, rather the Fed and what to expect from next week’s meetings,” said Camilla Sutton, chief currency strategist at Scotia Capital in Toronto.

U.S. producer prices fell 0.6 percent last month, the first drop since the series was revamped in 2009, pointing to tame inflation that could argue against an anticipated June interest rate increase by the Fed.

In addition the University of Michigan’s consumer sentiment index fell in March, although inflation expectations rose for a second straight month to its highest since September.

“It was a bit of a whipsaw, to be honest,” Sutton said, noting how the euro trimmed its losses after the PPI report only to see it lose ground after the sentiment report.

Dollar Index

[email protected]

You may also like...

Rules of Discussion on Dollar closer to euro parity

1. This forum is for discussion of financial markets. Please respect others view even if they are contrary to you.
2. Member's comments should lead to value addition in forum discussion.
3. If anyone is found making repetitive Explicit/Abusive/Racial comments, his account shall be banned and old posts will be deleted.
4. Providing Advice/Recommendations/Tips is fine but it should be free. Members cannot ask to be paid for it. Paid Advice is stricly prohibited
5. Spam links are not allowed. Too much promotion or using Contact info in ID will lead to account ban.
IMP : Memebrs are requeuested to flag any violations to keep Forum Clean