Euro Rises on Dollar Weakness

The euro rose a third of a percent on Monday on expectations the European Central Bank will maintain its current monetary policy at a meeting this week and not signal a dovish tilt. Dollar weakness, exacerbated by a US government shutdown and strengthening economic growth in Europe, also encouraged large investors to boost their expectations on the euro with UBS Wealth Management upgrading its short-term forecast for the single currency, Reuters reported. “If it was not for the interest rate differentials, the euro would be much higher against the dollar as the underlying fundamentals such as current account balances have improved significantly in recent months,” said Thomas Flury, head of currency strategy at UBS Wealth Management’s Chief Investment Office. In a report published on Monday, the unit upgraded the euro forecast against the dollar to $1.25 over the next three months from a previous forecast of $1.18. The single currency was up 0.3% to $1.226 in early trades, nearing a three-year high of $1.232 that it reached last Wednesday. It is up more than 2% this year after gaining more than 10% against the dollar last year.