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Euro Heads for Biggest Monthly Loss

Euro Heads for Biggest Monthly LossEuro Heads for Biggest Monthly Loss

The euro headed for its biggest monthly decline since March as economists unanimously forecast the European Central Bank will unveil additional stimulus this week, Bloomberg reported. The 19-nation currency approached the lowest in seven months versus the dollar as investors are pricing in a 100% chance of a 10-basis-point cut in the ECB’s deposit rate on Dec. 3. A gauge of the dollar climbed to the highest since March as futures predict the Federal Reserve will increase interest rates in December, expanding the divergence between the two central banks. “Euro selling will see its climax going into the ECB meeting, with a knee-jerk reaction to the outcome possibly sending it to new lows for the year close to $1.03,” said Daisuke Karakama, chief market economist at Mizuho Bank Ltd. in Tokyo. “The euro will likely see its trough in January-March but chances will grow for its rebound as expectations for US rate hikes will be more moderate next year.” The euro was little changed at $1.06 in London after sliding to $1.05 on Nov. 25, the lowest since April 14. 

Financialtribune.com