Euro clears $1.20 for first time since early 2015
THE euro topped $1.20 yesterday for the first time in more than two and a half years, as traders bet on the winding down of eurozone crisis-era stimulus measures.
At 0810 GMT, the single currency touched $1.2070, the highest level since early January 2015. That compared with $1.1978 late in New York on Monday.
In hotly anticipated speeches late last week, central bank chiefs from the US and Europe sidestepped the questions of economic stimulus and monetary policy.
European Central Bank chief Mario Draghi meanwhile 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 $1.20 level,” NFS Macro analyst Nick Stamenkovic said.
“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.
Sentiment was also dented in the wake of monster storm Harvey.
“The dollar continues to suffer from the Trump reality check,” noted Oanda analyst Craig Erlam.
“His promises of spending and tax cuts 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 Federal Reserve.
“Geopolitical tensions, troubles within the White House and Congress, and now Hurricane Harvey pile further pressure on the greenback.”
Harvey had battered into Texas on Friday as a Category Four hurricane, tearing down homes and businesses on the Gulf Coast, and triggering massive floods.