The news is by your side.

Dollar ends strong year vs euro, yen

The Dollar Index ended the year 11 percent higher against a basket of rival currencies.

The expectation that the Federal Reserve will tighten near-zero interest rates next year, a lure for investors seeking higher returns, marked a sharp contrast with the easing track set out by the European Central Bank and the Bank of Japan to counter a stalling eurozone and recession in Japan.

“The impressive rally for the greenback, which really only began around the middle of this year, has been fueled by a divergence in the policy outlook for the Federal Reserve, which is expected to raise US borrowing costs around the middle of 2015, and most other major central banks, that are expected to either remain on hold or ease monetary conditions further in the months ahead,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange.

“The prospect of an improving economy and higher borrowing cost has been and should remain a pillar of the dollar’s broad-based strength.”

In thin trade Wednesday, on the eve of the New Year’s holiday, the euro dropped to $1.2097 around 2200 GMT, from $1.2154 at the same time Tuesday, hitting its lowest level since July 2012.

Over the year, the euro has tumbled about 12 percent against the greenback, its worst year since 2005 when it shed 12.6 percent.

Neal Gilbert of Forex.com noted that the euro fell even though the US jobless claims data showed a larger increase in claims last week than expected.

“The success of the USD and the failure of the EUR throughout 2014 has been a long running and blatantly obvious story that has dominated the currency world,” Gilbert said in a research note.

“After nearly ascending the 1.40 mountain very early in the year, the EUR/USD has done nothing but taken a beating since.” (AFP)

2200 GMT   Wednesday        Tuesday

EUR/USD     1.2097             1.2154

EUR/JPY       144.87             145.20

EUR/CHF     1.2027             1.2021

EUR/GBP     0.7765             0.7810

USD/JPY      119.76             119.45

USD/CHF     0.9942            0.9889

GBP/USD     1.5576            1.5561




You might also like