For the first time in more than a decade, the Euro fell below the $1.08 price level in the wake of another dollar rally which brought the EUR/USD pair closer to parity, an occurrence most analysts did not expect would happen until at least 2016. Several major global banks had recently forecast that the greenback could become the Euro’s equal by next year, given the impact that the European Central Bank’s Quantitative Easing scheme is having on the common currency, thus many believe that the Euro’s downtrend is unlikely to come to a halt anytime soon.
As reported at 9:22 am (EDT) in London, the EUR/USD was trading lower at $1.0749, not far from the session low of $1.0735 with the high end of the trading range $1.0846. The policy divergence of the Fed to the world’s major banks has also helped to push the dollar higher versus the Japanese Yen, with the USD/JPY pair trading at a peak of 122.04 Yen, a near 8-year high, well off the session low of 120.615 Yen.
China Drop in PPI Sends Aussie and Kiwi Lower
In China, an unexpected near 5% decline in Producer Price Inflation (PPI) sent the antipodean currencies lower. The AUD/USD was lower at 0.7620, closer to the low end of today’s trading band at 0.7604 to 0.7695. The NZD/USD was also under pressure, trading down at 0.7268, within a daily trading band of 0.7260 and 0.7346.