Dollar steady against a weakened euro

Published: 23 Oct at 7 AM Tags: Euro, Dollar,

The dollar has hit its highest level in a week against the euro as analysts expect an inflation rise. The greenback has also been given a boost by news that as many as 11 banks in the eurozone have failed to pass stress tests from the European Central Bank. The results of the tests are due to be released at the weekend.

The euro is currently hovering around $1.2645 after hitting a low of $1.2637. The single currency could drop lower if there are indications of slow growth in the eurozone. However, although weak PMI readings could put pressure on the euro, they are unlikely to boost the dollar as US yields are still relatively low.

The dollar is worth 107.20 yen, an increase of 0.1 per cent. This week the greenback has managed to gain 0.2 per cent on its Japanese rival. The dollar index is little changed at 85.766 after hitting 85.789, the highest it has been in a week.

Elsewhere the UK pound has lost 0.1 per cent to trade at $1.6044. Sterling has been hit by reports that the Bank of England is determined not to push up interest rates.

The New Zealand dollar is down a tad to $0.7860 and the Australian dollar is steady at $0.8679.