With the last day of the month nearly over, the U.S. Dollar is on track to finish out September with the largest quarterly gain since 2008. In the past three months, the U.S. Dollar Index has rallied more than 7%, trading against a weighted basket of major peers, which included 11 consecutive weeks of record-breaking gains. All this is as a result of the Federal Reserve Bank’s likely tightening of interest rates in the coming months; when that materializes the Fed will then be the first among its Eurozone and Japanese peers to raise rates.
As reported at 7:58 a.m. (BDT) in London, the EUR/USD was trading at $1.2607 on the EBS platform, edging away from the session low at $1.2594 and the session peak at $1.2701; the September inflation data for the Eurozone as reported by Eurostat was disappointing again, though in line with expectations, with a decline to 0.3% (YoY) while core inflation fell to 0.7% (YoY) from 0.9% in August. The USD/JPY was trading higher at 109.6150 Yen, while the GBP/USD was lower at 1.6198.
ECB Easing Expectations Rising
Though the Eurozone’s inflation numbers are preliminary, it is still very likely to put additional pressure on the Euro; the ECB chief, Mario Draghi, will provide further clues as to the Euro’s direction at Thursday’s policy meeting outcome but analysts’ consensus is growing that the ECB will soon be taking a more dovish stance with additional easing in the form of QE.