Time to ditch the Euro
The Euro has continued to tumble today, still reeling from yesterday’s bullish Fed speech and some believe that further losses are on the cards.
At 4.34pm (GMT) the European currency was trading at $1.1132 after trading as high as $1.1302 in yesterday’s trading.
At their latest board meeting, yesterday, the US Federal Reserve hiked rates by 25 basis points which was widely expected by the market, but it was the following monetary statement which caught investors off guard.
In her speech, Fed president Janet Yellen noted that overall she was happy with the direction of the US economy including the jobs market and inflation was also picking up which seemed to go against the recent release of economic data from the US
The Euro as well as most of the major currencies took a hammering after the speech and some mentioned it was well due for a steady correction.
The euro got a bit overextended on the recent run higher as it ran out of new good news to take it higher and the European Central Bank did its utmost to dampen expectations for the beginning of any asset purchase taper," John Hardy, Head of forex strategy at Saxo Bank,
How much further the Euro can now fall is anybody’s guess, but with the Fed poised to lift rates higher later in the year and the European Central Bank expected to keep rates on hold the potential for big losses is highly possible
"That's all the Fed. With the Fed, people were expecting a little more dovishness," said Martin Arnold, Global FX & Commodity Strategist at ETF Securities.
"I think we are close to seeing a near top for the euro and a near bottom for the dollar." he added.