Euro holding firm as dollar flounders

Published: 21 Oct at 9 AM Tags: Euro, Dollar,

Expectations that the Federal Reserve will hold off tapering its easy money policy for the time being because of the recent government shutdown in the US have helped to keep the dollar down near its lowest level in eight months. Meanwhile the euro is heading towards its highest level this year. The dollar index is currently steady at 79.675. Analysts are now looking to tomorrow’s payroll figures to get a better fix on the state of the US economy.

Unless economic figures for the rest of the year show positive growth there is unlikely to be any change to the Fed’s strategy, something that could see the greenback driven lower.

Following an eight-month high on Friday of $1.3704 the euro has lost 0.1 per cent to $1.3678. Most investors are expecting the single currency to remain firm. The euro is currently up 0.1 per cent against the yen at 133.99 yen. This is close to a four-year high hit in September of 134.95 yen.

Although the dollar has recovered 0.2 per cent on its Japanese rival to 97.95 yen, it is still some way off last Thursday’s peak of 99.01 yen.

The Australian dollar remains close to its highest level in four months at $0.9662, a rise of 0.1 per cent. The Aussie is also up 0.2 per cent against the yen to 94.66 yen.