Dollar hits 6-month high against euro
The dollar stormed to a six-month high against the euro on Monday amid a growing realisation that the US economy was not deteriorating as quickly as others across the globe.
The dollar rose to a peak of $1.4908 against the euro in Asian trade, its strongest level since February, and hit a 21-month high of $1.9110 against the pound.
David Bloom, of HSBC, said the tide had turned in favour of the dollar.
He said that, while US economic data has been surprising on the upside recently, the deterioration in other economies had been dramatic. “This does not necessarily mean that the US economy is in good shape, just that relative to expectations the economy is improving.” said Mr Bloom.
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Maurice Pomery at IdeaGlobal said there has been a fundamental shift in attitude towards the European economy and interest rate expectations and the potential for a global slowdown – both of which were positive for the dollar.
He said longer-term “real money” FX investors - such as pension funds and asset managers - would have some decisions to make very soon over asset allocation following the dollar’s sharp rise that could prompt further gains in the currency.
“We remain bullish on the dollar,” said Mr Pomery.
I guess the lefties will have to wait a little longer for their “recession”. Tough.
