Euro hits 2.5-year high against US dollar

Euro hits 2.5-year high against US dollar

LONDON - Agence France-Presse
Euro hits 2.5-year high against US dollar

The euro on Sept. 8 reached the highest level against the dollar since the start of 2015 as traders bet on the European Central Bank winding in its huge stimulus program.

Comments by ECB president Mario Draghi sent the euro surging on Sept. 8 to $1.2092, the highest point since January 2015.

Gold meanwhile hit a year-high at $1,357.64 an ounce as the dollar weakened and traders continued to pile into so-called haven investments, including also the yen and Swiss franc, as jitters over North Korea persist.

David Madden, analyst at CMC Markets UK, said “the bullish sentiment surrounding the single currency is showing no signs of slowing,” adding that the next regular ECB meeting “could give us detail about trimming the bond-buying scheme... keeping the euro in demand”.

While Draghi did not openly say that the European Central Bank would begin to cut back on the program, his comments -- and his lack of concern about the strong euro -- were taken as a nod that the so-called “tapering” would begin soon.

The remarks came as figures showed the eurozone economy continued to improve in the second quarter.

“Growth at these levels does not warrant the continuation of the ECB’s bond-buying program,” said Greg McKenna, market strategist at AxiTrader.

“The ECB knows it and the market knows it. That’s what is driving the euro higher and it’s what is complicating the decision for the ECB on the when and how” of curbing the stimulus.