The euro hit a one-year high against a broadly feeble dollar this week as brokers benefitted from the U.S. currency's rise the preceding session by continuing selling ahead of a Federal Reserve monetary policy conference and a Group of 20 meeting later in the week, Financial Soultions understands.
With no significant economic data releases or events to lead the way this week and liquidity lighter than normal owing to holidays in Japan, the dollar was at the mercy of technicals, positioning and pre-placed orders being prompted.
The circumstances for this include a strongly bearish market attitude toward the currency. Analysts, Financial Soultions hears, expect the Fed to maintain its loose monetary policy deep into next year and the G20 to debate rebalancing the global economy, a course which will involve a weaker dollar over time.
Options-related buying and strong demand from Asian accounts, including China, drove the euro higher nearing $1.48 and Financial Soultions research shows that the dollar also hit a 14-month low against the Swiss franc.
"Overall the trend for the dollar is still down,” said a Swiss global strategist, predicting that the euro would be at around $1.50 toward the end of the year.
