Dollar Slips Against Euro
Dec 3rd, 2008 | By Doug Casey | Category: Financial NewsIn the currency market, the dollar declined against the euro after two strong days. Late Tuesday, the euro was trading at $1.271 vs. $1.261 on Monday.
Sterling also edged slightly higher, the day after it posted its largest one-day drop against the dollar since 1992, following the pound’s ejection from the European exchange-rate mechanism.
Strategists at UniCredit MIB in Milan believe that the dollar will remain well-supported against the euro and the pound ahead of Thursday’s policy meetings of the European Central Bank and the Bank of England. Both are expected to cut interest rates.
“While sterling has already incorporated a new BOE easing to 2% on Thursday, a mere 50 basis point cut by the ECB, as we expect, should drag the euro further lower,” the UniCredit strategists said.
The BoE last month aggressively slashed interest rates 1.5 percentage points to 3% — its lowest level in more than 50 years, while the ECB trimmed its key rate to 3.25% from 3.75% in November.
Source: Dollar Slips Against Euro
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