Euro Hits Low Amid US Dollar Strength
Solid ECN - The euro dropped to its lowest value since November 13th, at $1.075, because of a strong US dollar. People had less hope for the US Federal Reserve to start reducing interest rates soon after a strong US job report and cautious words from Jerome Powell, the Federal Reserve Chair, about lowering rates. Meanwhile, the European Central Bank (ECB) is expected to delay easing its monetary policies even though recent data shows the economy is not doing well.
Reports indicated that in December, the drop in prices manufacturers get for their products worsened in the Eurozone, and Germany saw a bigger-than-expected decrease in exports due to low demand worldwide. The Ifo Institute noted that a lack of manufacturing orders is increasingly problematic for Germany's economy. Market predictions for ECB rate cuts by the end of the year have decreased to about 125 basis points from 138 points last week.