EUR Rallies Against USD as China Sparks Fed Doubt

Following calls for parity against the dollar just a few months ago, the single currency is now one of the few assets in the world rallying.

Global stocks had their worst week of the year last week and the only assets to perform well were the traditional “flight to safety” assets, such as the Swiss franc, U.S. Treasurys and gold.

However, the euro has proved the surprise outperformer, appreciating 4.5 percent against the U.S. dollar in the last two weeks. It continued to gain on Monday, rallying 1.35 percent higher against the greenback at around $1.1552 in afternoon London trade.

Analysts attributed the strong performance to waning fears about European economies, with one saying the euro was demonstrating “safe-haven” qualities.

Senior foreign exchange strategist at Rabobank, Jane Foley, said that shorts on the euro (bets that the currency will weaken) had been slashed of late.

via CNBC

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza