Forex Blog: Currency Trading News & Analysis.

September 11th 2007

Interest rate story buoys Euro

The Euro is closing in on the record high it achieved against the Dollar in July.  Once again, it is the interest rate story which is driving the currency skyward.  The continued rise of the collective economies of the EU is coinciding with a decline in the American economy, spurred by falling prices in the real estate and capital markets. As a result, economists are forecasting that this month’s respective central bank meetings will bring about a rate hike in the EU and a lowering of rates in the US. This prediction, which is also supported by the prices of interest rate futures, would narrow the EU-US interest rate differential to just 75 basis points!  Bloomberg News reports:

Traders also added to wagers the euro will strengthen against the U.S. dollar, figures from the Washington-based Commodity Futures Trading Commission
showed on Sept. 7.

Read More: Euro Rises to Month-High Against Dollar on Growth, Rate Views

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Posted by Adam Kritzer | in Central Banks, Euro | No Comments »

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