The common currency Euro recovered slightly after earlier coming under pressure in the wake of China’s slumping equity market. Investors are concerned that the second largest economy on the globe may be on the verge of becoming destabilized. In the US, the markets remain focused on data that could dictate a possibly imminent hike in interest rates. Over the last year, that possibility has lifted the US Dollar Index, which had risen nearly 20%. Currently, the Dollar Index is trading at 96.906 .DXY, down 0.14%
As reported at 11:20 (BDT) in London, the EUR/USD pair was trading at $1.1042, edging up 0.15% and moving toward the center of today’s band which ranged from $1.1025 and $1.1075. Analysts believe that, despite short bounces, given the European Central Bank’s easing efforts, the Euro is likely to drop to $1.05 before the year’s end. The EUR/GBP was lower at 0.7041 pence, a decline of 0.30%.
Is a BoE Rate Hike Looming?
In the UK, the Pound Sterling got a lift after yesterday’s data seemed to cement the markets’ perception that the Bank of England could also be soon raising rates. Sterling hit a 7½ year peak after the inflation data; currently, the GBP/USD pair is trading 0.10% higher at $1.5674; the pair slipped from a session peak of $1.5697.