Policy Divergence Boosts Dollar

Earlier, the US Dollar had remained close to a 2½ month peak versus the common currency Euro as FX traders reconsider the likelihood of a 2015 rate hike from the Fed. At the same time, the seeming divergence in monetary policies between the Fed and the European Central Bank is likely to weigh on the Euro for the long term. The ECB recently signaled that it would add more liquidity to the Eurozone’s money supply with additional asset purchases before the end of this year. Both GDP growth and inflation have continued to deteriorate in the Eurozone, even despite what the extraordinary efforts of Mario Draghi and the ECB.

As reported at 10:25 am (GMT) in London, the EUR/USD was trading higher at $1.0968, a gain of 0.36%. In today’s trading, the pair ranged from $1.0906 to $1.0976. The EUR/JPY was 0.15% higher 132.5650 Yen while the USD/JPY was trading at 120.8795 Yen, a loss of 0.19%.

Eurozone Consumers Upbeat

In the Eurozone, the Euro seems to have gotten a boost from the Economic Sentiment Indicator which was released earlier today by the European Council. The reading showed an unexpected improvement at 105.9, against expectations of a fall to 105.2. The indicator shows the results of a consumer confidence survey and indicates that consumers have a positive outlook for the Eurozone economy as a whole.