The euro is approaching parity with the dollar – The Economist

The euro breaks to a new level, that of the 1.06 dollars, the result of a fall that already amounts to 6% since the triumph of Donald Trump.

The turmoil on the debt are extensible to the forex market, and in particular at the crossing of the euro with the dollar. In little more than a week, the currency community accumulates a corrective even above 6%.

The past day 9, even before the opening of european markets, and when the count gave already a clear advantage to Donald Trump in the election to u.s., the euro reached 1.1299 dollars. Since then triggered a path downtrend that has continued in recent days.

only two days Ago, on Wednesday, lowered the threshold of 1.07 dollars for the first time in the year. And today, for the first time, recording new lows below also of 1.06 dollars.

The 1.058 dollars recorded in today’s session continue to reduce the buffer that accumulated the euro to avoid the parity with the u.s. currency.

ECB vs Fed

The triumph of Donald Trump could exacerbate the differences in monetary policies on either side of the Atlantic. At the December meeting of the European Central Bank, except surprise, be extended its bond purchase programme beyond march 2017. The doubt lies in whether or not to keep the present amount in your purchases or if you choose whether to start the brake in its monetary stimulus.

once known the decision of the ECB at its December meeting, the Federal Reserve will meet to approve a new rise in interest rates. In his appearance yesterday in the Congress of the united States, Janet Yellen prepared the markets for this rebound. He warned of an “early” rate rise, and he echoed the expectations of a resurgence of inflation.

The president of the Fed paved the way for increases additional interest rates if inflation and the labour market in the EU continues to provide signs of strength. The appearance of Yellen coincided just with the publication of new macro data on the CPI and employment. Unemployment weekly improved even the forecasts, and inflation adjusted to what is expected to be at 1.6%, closer to the goal of the Fed is 2%.

The pound back against the euro

The fall of the euro also extends to its junction against the pound. The currency community is deflated in the day of today, up to 85 pence.

The declines of the euro exceed the 8% in less than a month and a half, particularly since last October 6, in the ‘minicrash’ of the pound, the crossing shot above 93 pence.

The dollar erased the shine of gold

The sharp escalation in which is noted the dollar passed bill also the quote of one of the investment alternatives the green ticket, gold.

The active shelter soared to well above $ 1,300 the ounce on November 9, as the initial response to the triumph of Donald Trump in the us elections. Less than two weeks later, the gold will be deflated and put you at risk even at the level of 1,200 dollars per ounce.

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