Euro Surges as Dollar Falls
The euro continues to reach record highs against the dollar, reflecting widespread fears that the US is headed for recession.
Having burst through the $1.53 mark in early March, negative sentiment toward the dollar and sustained strong performance from the eurozone conspired to drive the euro to intra-day highs of $1.5904 on Monday 17 March.
Even despite promising US unemployment figures, the euro spent the rest of March above $1.53. And news of the eurozone's record-breaking 3.5% CPI revealed on Monday March 31 March has led to remarks that the pressure is off the ECB to cut rates and the currency may have more to run.
Tight spreads on dollar crosses
However, with hints that some European banks may have been affected by the sub-prime credit crunch more than first thought, is the dollar ready to rally back against the euro? Whatever your view you can take a position on the greenback with our wide range of forex pairs. Our spread on spot EUR/USD is just 2 pips, while we quote 3 pips on the dollar versus GBP and JPY.
Alternatively you might consider the US Dollar Basket - a weighted index of the dollar against a range of currencies which exposes you to moves in the dollar without attaching the risk to one particular currency.
The US Dollar Basket expires at a set forward date, based on the Dollar Index contract on NYBOT. And there is no commission to pay on the contract, just our spread.
For further information see our Forex page. For US Dollar Basket contract details, see the Forward Indices table.
The above comments do not constitute investment advice and IG Markets accepts no responsibility for any use that may be made of them.
01/04/08