EUR/USD Hits 1.20 Ahead of US Employment Reports Due This Week

August 29, 2017 Share Print 0

The euro has hit $1.20 for the first time since January 2015 as the prospect of a US interest rate rise recedes.
Hurricane Harvey’s impact has led analysts to assume the US central bank will not want to risk curbing economic growth and fears over North Korea’s activities have unnerved investors.

A rise in interest rates tends to draw investors to a currency, taking advantage of the higher returns.
Meanwhile, the euro has itself been gaining against a range of currencies.

Against the dollar, it has risen by almost 15% so far this year.

The euro has strengthened in recent months, as the eurozone’s economy improves and markets predict the European Central Bank could start to cut back the money-printing programme it has been running to repair the ravages of the eurozone crisis and credit crunch of the late 2000s.

The dollar was also undermined by Friday’s annual meeting of central bankers at the Jackson Hole resort in Wyoming at which US central bank chief Janet Yellen’s speech gave no hint that the Federal Reserve was planning any policy change that would support the dollar.

At the same event, European Central Bank boss, Mario Draghi, did nothing to talk down the euro.

via BBC

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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 has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. 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.