The Euro touched a fresh 7-month low against the US dollar today as strong data out of America added to the case for an interest rate hike by the US Federal Reserve in its December meeting.
The Euro fell as low as 1.06.30 against the dollar after consumer prices in the US rose for the first time in 3 months, coming in at 0.2 percent last month as the cost of petrol and other goods jumped while the yearly figure came in at 0.2 percent against analysts’ expectations of a 0.1 percent rise.
Although the number is slightly below the US Feds target rate of 2 percent, many now believe it is enough for the US central bank to pull the trigger on rates in December, which sent the European currency tumbling.
Adding to woes is speculation that the European Central Bank may increase its stimulus program when they meet on December 3rd, which is expected to put even further pressure on the Euro as we head into the New Year.
A growing number of analyst are now not ruling out the Euro being on parity with the US dollar in the next couple of months as the Fed tightens monetary policy and the ECB floods the Eurozone with cash.