Home Forex Market News Asian Session – Euro below $1.28 to fresh 14-month lows

Asian Session – Euro below $1.28 to fresh 14-month lows

The US dollar extended gains to peak at a fresh 6-year high after being boosted by strong US new home sales numbers.  Data released on Wednesday showed that sales of newly built homes in the US surged 18% in August, the highest level since 2008.

The dollar moved back above the key 109.00 yen level to a high of 109.33 before falling back.

The euro weakened further in Asia today after falling on a combination of worse-than-expected German Ifo and better-than-expected US new home sales data.

Meanwhile, adding pressure on the euro were comments by ECB President Mario Draghi yesterday who said that the central bank was ready to take additional steps to support economic recovery in the Eurozone. Draghi added that the ECB will keep monetary policy loose for as long as it takes to push ultra-low inflation in the Eurozone back up closer to the Bank’s 2% target level.

The euro touched a new 14-month low of 1.2761 with potential for further downside. The widening of the US and Eurozone interest rate differentials will likely weigh on the currency further in the long run.

Sterling edged lower to 1.6314 as there was caution ahead of Bank of England chief Mark Carney’s speech in Wales later today.

Looking ahead, there will be limited data releases from Europe but US data will be closely watched later. These include core durable goods orders, jobless claims and flash services PMI data.

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