Euro Falls Against The Dollar Hitting a Two Week Low
The European Central Bank policy maker Christian Noyer commented that the economic growth seems to be weaker than anticipated, after the euro declined against 11 major currencies. Interest rate cuts by the ECB are becoming a possibility.
The euro has reached the lowest mark in two weeks, dropping 0.3% against the dollar making it now $1.4638. The euro fell against the yen as well. The yen traded at 158.27 up from 158.25. The yen fell against the dollar to 108.12.
The pound is also losing power as well. The pound is down to $1.9516 from $1.9612.
President’s Day made for a low trade volume today. Markets in the U.S. are closed for the holiday. Thin trading is expected today, and some expect exaggerated market moves.
Experts say that the strengthening of the dollar due to the slipping European currencies is only temporary. Bernanke signaled the possibility of further rate cuts in his testimony last week. Economic reports last week showed that consumer confidence is declining and regional manufacturing activity in New York slowed last month. Bernanke is calling the current economic conditions “downside risks.”
If recession is not yet official, the United States is certainly very close to recession. There is little positive data to indicate that the economy is on it way up as of late. Consumers have to spend in order to give a god
boost to the economy. The hopes of that happening in a significant enough way are pretty grim. The reports from last week confirm that people are trying to hang on to their money and too many people are in overwhelming debt.
The euro’s decline signals possible evidence that the poor conditions of the U.S. economic are making a global impact. The Federal Reserve is closely linked to the ECB, although their approaches to monetary policy have differed. The ECB may have no choice but to begin reducing rates, which is something that they have avoided for years. There is little evidence to deny that the U.S. Federal Reserve will cut rates further at the next meeting.
As for the dollar gaining strength, that might be temporary.
February 18th, 2008 at 12:04 pm
[…] All Finance - Dictionary Of Financial Terms | Financial portal wrote an interesting post today onHere’s a quick excerptEuro Falls Against The Dollar Hitting a Two Week Low By Chesley Maldonado | February 18th, 2008 The European Central Bank policy maker Christian Noyer commented that the economic growth seems to be weaker than anticipated, after the euro declined against 11 major currencies. Interest rate cuts by the ECB are becoming a possibility. The euro has reached the lowest mark in two weeks, dropping 0.3% against the dollar making it now $1.4638. The euro fell against the yen as well. The yen traded […]