Dollar rally stalls as euro gains strength

Published: 5 Nov at 7 AM Tags: Euro, Dollar,

The recent dollar rally appears to have stalled as the euro makes gains against a backdrop of uncertainty about the action that will be taken by the European Central Bank. After hitting a four-year high at the beginning of the week of 87.406 the dollar index has slipped back to 87.027, a loss of 0.3 per cent. Monday also saw the greenback hit a seven-year high against its Japanese rival before falling from 114.21 yen to 113.53 yen today.

The euro has bounced off a two-year low of $1.2439 to hit $1.2548. At one point the single currency was as high as $1.2577.

Colleagues of Mario Draghi, head of the ECB, are reportedly unhappy with his decision to increase the central bank’s balance sheet and have been angered by his erratic communication and secretive management style. There are currently doubts that Draghi’s colleagues are prepared to support a short-term easy money policy.

The euro has hit a seven-month high against the yen and was last trading at 142.45 yen. Earlier the euro went as high as 142.63.

Elsewhere the Australian and New Zealand dollars have performed well. The kiwi has been supported by a fall in jobless rates and is worth $0.7830 and the Aussie dollar is up to $0.8742.