Dollar Surges vs. Euro- Poor Outlook for European Economy
Aug 8th, 2008 | By Doug Casey | Category: Financial News, US Dollar & Forex TradingIn currency news, the dollar continued its gains against the euro. Late Thursday, the euro was trading at $1.5413 vs. $1.5473 on Wednesday.
The dollar’s upswing brought it to its highest value in almost eight weeks. The rise was fueled largely by concerns about European economic weakness rather than by strong U.S. data.
European Central Bank President Jean-Claude Trichet predicted that European economic growth would slow in the second half of 2008.
The ECB held interest rates at 4.25% in an effort to combat inflation, but this may further exacerbate its current economic slowdown.
“The market is entitled to be scaling back significantly further amid ECB tightening,” stated David Simmons of Royal Bank of Scotland Group (RBS). “Policy makers will continue to focus on inflation, but some of the real economic data has been pretty grim. In my opinion, 2009 will include a European rate cut and a weak euro story.”
According to Kevin Edgeley of Goldman Sachs, if the euro were to drop below $1.53, it “would signal a longer-term dollar bull phase” and could result in a drop to $1.46.
Source: Dollar Surges vs. Euro- Poor Outlook for European Economy
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