US Dollar Rallies 8-Month High Against Euro

The US dollar rallied at eight-month high against the Euro on Friday amid weak German business sentiments and strong New York deals.

The American currency hit the multi-month high against the European counterpart as the US durable goods orders increased at an exceptional pace last month creating a more optimistic environment in the market.

The US durable goods orders grew by 0.7% in June, the Commerce Department data showed. It declined by 1.0 percent in May.

Meanwhile, the weak data in the German business also raised concerns that geopolitical tensions were taking a toll on the Eurozone economy.

According to the analysts, weak business sentiments in the German market emphasized the impact of tensions that grew following crisis in Russia and Ukraine on Germany which is biggest economy of Europe.

Richard Franulovich, senior currency strategist at Westpac Securities in New York, said, “The geopolitical tension and uncertainty are already exerting a palpable effect on sentiment toward Europe and the euro.”

The Ifo business climate index of Germany, which is based on a monthly survey of around 7,000 companies, slide to 108.0 in July. This is a third consecutive decline in monthly survey.

Richard Scalone, co-head of foreign exchange at TJM Brokerage in Chicago, said, “We continue to get strong economic releases out of the US. At the same time, we are getting not-so-great economic releases out of Europe.”

The euro was last down 0.27 % against the US dollar at USD 1.3429 after falling to an eight-month low of USD 1.34210.

Meanwhile, the analysts is eyeing at the Federal Reserve policy meeting which is scheduled for next week on Monday and Tuesday. Also the market is closely waiting for the US government’s nonfarm payrolls report for July, which is set to come out on Friday.

(Wall Street OTC)



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