As expectations continue to growth that the European Central Bank is ready to embark on another round of massive liquidity, also known as Quantitative Easing, the Euro fell through month-long support levels and struck a 6-week trough versus the U.S. Dollar. At the same time, the Dollar has been supported by the rise in yields in US government treasury instruments, with the U.S. Dollar Index hitting a 14-year peak recently. Markets will be watching for improved economic data from the U.S. which could provide a further bounce for the greenback.
As reported at 9:35 am (GMT) in London, the EUR/USD was trading about 0.5% lower at $1.1121 while the EUR/JPY was lower at 133.0900 Yen. The U.S. Dollar had edged higher against the Japanese Yen, with the USD/JPY trading at 119.75 Yen. The U.S. Dollar Index, used to gauge the strength of the greenback, was higher at 95.730 .DXY, a gain of nearly 0.3%. Also in Asian trading, the AUD/USD had recovered slightly, albeit briefly, on the news that the Australian economy unexpectedly grew in the 4th quarter of 2014 with the AUD/USD hitting a session high of $0.7835 before edging lower to $0.7812, a loss of 0.1%.
Swedish Krona Pushed Higher
In Sweden, the central bank’s deputy governor recently highlighted the risk of a further appreciating Swedish Krona given the likelihood of imminent QE from the ECB, which sent the EUR/SEK to 9.2091 Swedish Krona, a multi-month low, before recovering slightly to 9.2343.