EUR/USD Falls as Dollar Continues to Strengthen

Last week the EUR/USD pair remained fairly steady until late on Wednesday when it dropped from 1.2963 to 1.2939. It recovered slightly over Thursday but on Saturday was down at 1.2831.

The Euro’s fall in value was the result of an apparent tightening of monetary policy in the US with the Euro zone heading in the opposite direction. The US Federal Reserve suggested that it will close its bond buying stimulus program next month and raise interest rates next year. At the same time the European Central Bank has cut interest rates and announced that it intends to buy asset backed securities to help stimulate the economy.

All the indications suggest that the dollar is going to remain strong for the time being, so while this pairing will probably not experience any major changes this week, it is likely to continue in its downwards trend.