Euro Strengthens Further Versus USD
Euro continues to strengthen versus US dollar today. The euro/dollar pair added 0.23% to trade at 1.1373 level. The single currency has lost 2.7% against US dollar since July 1, and faces more headwinds before the end of the year.
After a weak third quarter of growth in the Eurozone, there are serious concerns that the slowdown will continue in the fourth quarter. Last week, the ECB officially terminated its bond-purchasing program (QE), despite economic slowdown. Meanwhile, Eurozone final CPI dropped to 1.9% in November, down from 2.2% a month earlier, below the initial forecast of 2%.
Further market sentiment will depend on the outcome of the Fed meeting, which will end tomorrow. According to forecasts, the US central bank will raise the target range for the federal funds rate to 2.2%-2.50% at its last meeting in 2018. But more important will be the predictions of the regulator regarding the further rate of rate increases.
Today’s data showed, that German Ifo Business Climate fell to 101.0 in December, weaker than consensus forecast of 101.8. The index marked its lowest level in more than two years.