The dollar firmed on Thursday after the euro retreated to a five-month low on concerns political developments in Italy could cause wider disruptions in the euro bloc, while rising U.S. Treasury yields knocked emerging market currencies lower.
The dollar fell on Wednesday from its strongest levels in 2018 against a basket of currencies due to mild profit-taking, but is expected to resume its rise on solid U.S. economic growth and more interest rate increases anticipated from the Federal Reserve.
For months I have been explaining why I felt the Dollar was undervalued while non US $ currencies were in many cases (Euro,Swiss,Yen) extremely overvalued given the condition of our economy versus theirs and our higher interest rate picture.
The euro edged off eight-week lows on Thursday as traders readied for a European Central Bank meeting, when investors will be searching for any signals about when the bank will begin unwinding its stimulus.
The dollar held near a two-week low on Thursday against a basket of currencies as investors remained cautious over possible Western military action against Syria, while the euro was also steady before minutes of the European Central Bank (ECB)'s March meeting.
The euro held near a six-week high on Wednesday as investors turned more optimistic about the outlook for global markets in the second quarter, with relatively higher-yielding currencies such as the Australian dollar well supported.
The euro gained on Monday and the dollar dropped as last week's strong U.S. jobs numbers and receding fears over a trade war helped a rebound in risk appetite, with higher yielding currencies also performing well.
The dollar rose against a basket of major currencies despite the prospect of global trade war as President Trump is expected to follow through with plans to impose tariffs on steel and aluminum imports.
The U.S. Dollar is starting to firm up while non U.S. currencies have stalled. The one here which may be a buy is the Canadian Dollar which has been slammed from highs at 8175 in late January to lows overnight at 7700.
The euro slipped to a seven week low on Thursday, as investors bet that monetary policies willdiverge in the euro zone, where interest rates look set to stay at record lows throughout 2018, and the United States, where as many as four hikes are expected.
The euro zone economy, for so long a source of uncertainty, has enjoyed its best year in a decade, clear evidence it has broken out of the prolonged debt crisis that raised fears about the very survival of the euro currency.
The euro jumped against the dollar on Thursday after the European Central Bank said it could revisit its communication stance in early 2018, boosting expectations that policymakers are preparing to reduce their vast monetary stimulus program.
The dollar fell on Thursday, failing to hold the previous session's gains on the back of upbeat U.S. data and minutes from the Federal Reserve, as the euro resumed a rally that has taken it close to its highest levels in three years.
The Pound will rise against the Euro in the year ahead as markets awake to the realization the UK is headed for the "softest of all possible Brexits", say strategists at BMO Capital Markets, the investment banking unit of Bank of Montreal.
The U.S. dollar gained against the euro on Thursday after the European Central Bank raised growth and inflation forecasts for the euro area, but stuck with its pledge to provide stimulus for as long as needed.