| Videos | Channels | Search |
Why the euro's strength is "unsustainable"
As the euro rises to a near six-week high against the dollar, Neil Staines, Head of Trading at ECU group, says he thinks the single currency's strength is "unsustainable"
He thinks that as we move into next year, we will see rate hikes being priced in, and that’s when the dollar will start to outperform. Subsequently the euro will start being undermined as a currency.
Neil explains the resilience of the euro is in relation to the uncertainty surrounding the Fed's stimulus programme, and he thinks there is a "much greater chance of tapering in December than the market has priced in". In addition, he says strong bidding in European yields is driving the euro higher.
Analysts expect the Fed to start reducing its big bond-buying program no later than March. On Friday, data showed US employers hired more workers than expected in November, driving the jobless rate to a five-year low of 7.0 percent.
Last week, the European Central Bank kept interest rates unchanged at record lows, as widely expected, and offered a slightly more upbeat assessment of the eurozone economy.
Meanwhile, recent data showed that Germany's trade surplus fell in October as firms' and households' increased appetite to spend saw import growth far outpace that of exports.
01:21 minutes
Tags: common currency, dollar, dollar high, dollar strength, ecb, ecb rate decision, ecu group, eu, eu area, eu exports, eur, eur usd, euro, euro high, euro strength, euro zone, european central bank, european union, european yields, eurozone, exports, german exports, german trade, german trade surplus, germany, growth, imports, inflation, interest rates, lea jakobiak, neil staines, neil staines ecu, recovery, saxo bank, saxo tv, single currency, tradingfloor.com, us dollar, us jobs data, usd, video, yields