EUR/USD Lifted By Inflation Concerns
By Grace Cheng on December 10, 2007 | More Posts By Grace Cheng | Author's Website
There’s little to no enthusiasm in bidding up the US dollar today as the clock ticks closer to Tuesday’s crucial FOMC rate announcement. Not only that, we are also hearing of more writedowns: Swiss bank UBS announced a further US$10 billion writedown in subprime exposures. That makes it the biggest European victim of the subprime crisis. It is expected to
post its first full-year loss, and plans to raise cash (some US$11 billion) by selling bonds to the Singapore government (its single largest purchase so far) and a Middle East investor.
This kind of bad news from the financial sector dampens investors’ appetite for the greenback.
At the moment, EUR/USD’s nearest resistance is around 1.4730-50, then 1.4770-80. The pair’s getting support from ECB’s hawkish tone on inflation risks in the Eurozone.
EU Commissioner Joaquin Almunia said Monday that US officials have started to show "some signs of worry" about the recent sharp depreciation of the USD against other currencies in recent months.
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