The stock market saw some very interesting and turbulent events go down over the past twenty days or so. Good news for USD traders was been revealed late in October, as the euro rebounds from the slip in value.
As it seems the dollar has been growing strong in value against the euro after a seven-month low, whereas, according to statistics, economic growth in the monetary union has reached its peak being never stronger in this year.
The dollar started to rise slowly and rose up from $1.0859 to $1.0890 against 1 EUR. The euro rapidly tumbled down whereas investors placed their trades on US short-term rates on Friday, October 18. Still, during the morning trading session in Europe the Purchasing Managers Indexes (PMIs) in the Union were stronger, especially for manufacturing and the services sector, which was not expected last month at all. The flash composite showed a 10-month high of 53.7 for the euro, whereas the manufacturing index witnessed a 30-month high with 53.3.
The weakening euro caused rumors, and experts are speculating whether the European Central Bank (ECB) is going to taper its quantitative easing. Tom Floyd, Foenix Partners’ senior sales trader, commented that it is quite possible and that it might be the truth since the manufacturing index was the highest since 2014.
Earlier in October, according to speculations in the expert circles, the ECB has been considering rearranging its bond-buying program by reducing the monthly fund of 80 billion euro for the program.
These speculations were ruled out by the ECB president himself who said that the ECB was not considering decreasing its asset buying volume. Inflation has been low, and the ECB team did not discuss the topic of tapering at all.
The PMI index is a positive indicator that the trading of the EUR/USD pair will increase. The Intercontinental Exchange Index (ICE) for the dollar was as low as 0.1% after the penultimate weekend in October, breaking its eight-month high which was reached on Friday, just to tumble back down on Monday, October 21.
Good news for the dollar does not stop with rising against the euro, as it also increased against the yen which dropped from 103.83 to 103.92. The Chinese yuan also dropped to 6.7837 against the USD in Hong Kong trading. The juan was put on the international trading market just several years ago, in 2010. The GBP made no significant movements except for the insignificant fluctuation from 1.2231 on Friday to $1.2236 on Monday.
