x
Breaking News
0

FOREX-Euro hits four-month high as dollar begins year on back foot

ForexJan 02, 2018 18:10
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FOREX-Euro hits four-month high as dollar begins year on back foot

* Euro's 2-1/2 peak against dollar within sights

* Commodity currencies rally again

* MiFID II introduction weighs on volumes

* Graphic: World FX rates in 2017 http://tmsnrt.rs/2egbfVh (Adds details, quote)

By Tommy Wilkes

LONDON, Jan 2 (Reuters) - The euro traded close to its highest level in three years against a broadly weaker dollar on Tuesday, the first trading day of 2018, on optimism over a brightening economic picture in the euro zone.

It finished 2017 with its best year against the dollar since 2003 as European economies strengthened and expectations the European Central Bank will wind down its monetary stimulus grew, boosting demand for the single currency.

The euro started the year by adding to those gains, and climbing as much as 0.6 percent to a four-month high of $1.2081, within sights of the $1.2092 it hit in September, the highest since early 2015.

The single currency was also higher against the Japanese yen at 135.64 EURJPY= , reaching levels not seen since late 2015.

Euro zone manufacturers ended 2017 by ramping up activity at the fastest pace in more than two decades, a survey showed on Tuesday, and rising demand suggests they will start the new year on a high.

"It's a combination of dollar weakness and euro strength. The euro strength is underpinned by some hawkish comments from the ECB's Coeure," said Commerzbank (DE:CBKG) currency strategist Thu Lan Nguyen in Frankfurt, referring to comments made by the European Central Bank's Benoit Coeure

Coeure said on the weekend he saw a "reasonable chance" the bank's bond purchases would not be extended beyond September. said the euro was approaching levels where the ECB might start to signal some discomfort with its rise.

The euro gained as the dollar was broadly weak. The dollar's index against a basket of six major currencies .DXY slipped to 91.75, its weakest level since September.

For the whole of 2017, the dollar index slid more than 9.8 percent, the greenback's worst annual performance since 2003.

Alvin Tan, an FX strategist at Societe Generale (PA:SOGN) in London, said the end of a dollar funding squeeze typical of December and a rally in commodity prices, had reduced demand for dollars since the holiday season, but that the euro was also gaining because of the better economic performance of its member states.

"Fundamentally, what is helping the euro is the brightening economic outlook in the euro area. The momentum should continue," he said.

Tan said Societe Generale forecasts the euro will strengthen to $1.25 by the middle of the year.

Some foreign exchange strategists said traders were wary of taking on big positions ahead of the introduction on Wednesday of the wide-ranging EU financial markets directive known as MiFID II, which is aimed at making European markets more transparent and providing better value for investors.

For Reuters Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets

FOREX-Euro hits four-month high as dollar begins year on back foot
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

 
Are you sure you want to delete this chart?
 
Write your thoughts here
 
Replace the attached chart with a new chart ?
Post
Post also to:
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
 
Replace the attached chart with a new chart ?
Post 1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email