US dollar strengthens versus euro

Story link: US dollar strengthens versus euro

The US dollar notched its biggest one-day gain versus the euro in two weeks on Wednesday after a survey of consumer confidence in Germany dropped to 4.3 in November, its lowest level in almost two years.

The decline in confidence made it less likely that the European Central Bank will hike Eurozone interest rates anytime soon.

At just after noon in New York the greenback was trading at $1.4773 to the euro after trading at $1.4748 to the euro earlier in the session.

At the same time the US currency was at $2.0713 to the pound.

The gains for the greenback came even though it is widely expected that the Federal Reserve will cut interest rates at its December meeting and possibly again in January, especially after remarks by the Fed’s Vice Chairman, Donald Kohn, said that recent market volatility could make it more difficult for businesses and consumers to get credit.

The yen and the Swiss franc both weakened as a rally in equities markets around the world made investors more enthusiastic about risky investments such as carry trades.

In early afternoon trade in New York, the yen was trading at ¥110.3250 to the dollar, at ¥162.9886 to the euro, at ¥228.5216 to the pound and at ¥97.3839 to the Australian dollar.

Meanwhile, the Swiss franc traded at SFr1.1175 to the US dollar, at SFr1.6509 to the euro and at SFr2.3147 to the pound.