EUR/USD remains at Two Year High above 1.38 on Fed Outlook

The dollar slid to a two-year low versus the euro as signs that U.S. growth was hampered by a government shutdown fueled speculation the Federal Reserve will push back the timing of monetary stimulus reductions.

The greenback weakened versus most major peers before a report today that may show continuing jobless claims in the U.S. rose. Demand for Europe’s shared currency was supported before data that may indicate faster expansion in the region’s manufacturing and service industries. Australia’s currency strengthened after a private report signaled manufacturing growth in China. Malaysia’s ringgit rose for a second day before the government presents the budget tomorrow.

“U.S. data isn’t likely to swing the picture back to talk of tapering,” said Janu Chan, an economist at St. George Bank Ltd. in Sydney. “It’s more likely we will see the U.S. dollar continuing to struggle.”

Bloomberg

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