The euro slumped for a fifth straight session against the U.S. dollar on Friday to a 3-1/2 week low as falling European interest rates drove investors into greenbacks and the yen.
“You can look at euro/yen, clearly breaking lower. The big picture globally is negative yields in the euro zone and long yields trading at incredibly low yields, substantially lower than Japanese yields,” said Jens Nordvig, global head of currency strategy at Nomura in New York. “That is triggering this persistent (fixed income) asset allocation shift out of euro zone,” he said.
European Central Bank measures to loosen monetary policy via a program of bond buying contrasts against the U.S. Federal Reserve’s trajectory for tightening policy after ending its own massive stimulus plan which is credited with helping boost economic growth.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.