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Euro dollar could drop to 1.20 next year
The euro dropped against the dollar after the European Central Bank surprised investors by cutting interest rates. Neil Staines, Head of Trading at the ECU group, thinks that short term, euro dollar will find support around the 1.32 level, and the "psychological level" of 1.30.
But as we start to move into next year, he believes euro dollar will move down towards 1.20. He adds that Sterling is in a "much better place" relative to the eurozone.
The ECB on Thursday cut borrowing costs to a record low of 0.25 percent in response to a sharp drop in inflation. The bank expects rates to remain at present or lower levels for an extended period.
Commenting on the decision, Neil said: "We’re in a period where there’s doubt that the ECB has the tools to stimulate nominal growth in the Eurozone – particularly in relation to nominal debt, and I think that is an issue going forward."
01:44 minutes
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