The euro has struck its highest level against the dollar for nearly two and a half years in the wake of the European Central Bank’s decision not to cut interest rates further. At one point Friday, the currency, which is used by 18 European Union countries, rose to $1.3917, its highest rate since it touched $1.4170 in October 2011.The currency backed off after a slightly stronger than anticipated U.S. jobs report for February. The 175,000 increase in payrolls was ahead of the consensus forecast in markets for a rise of about 150,000. As a result, analysts said the U.S. Federal Reserve would likely continue reducing its monetary stimulus, providing a fillip to the dollar. But analysts think the euro is on course to climb further over the coming days, largely as a result of Thursday’s decision by the ECB to not cut interest rates following a run of relatively upbeat economic data across the eurozone.
Source: Yahoo Finance
2 Comments
While this may be good news to the EU’s stronger states like Germany, this valuation of currency will surely make it even more difficult for countries like Greece to recover. A relatively vauable currency decreases exports and increases imports.
What does this tell us? When currencies are deflated (like euro), then it can suffer from deflation. Would it be okay for the current EU or Greece like peaseley mentions above?
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