The US dollar has hit its highest rate against the euro since early January, as investors seek refuge from US spending cuts in the greenback, and Italy flounders following its election.
Last week, following the euro’s stellar gains in January, I asked the question, how high will the euro rise? Well, this week it seems we have an answer, as the euro not only stabilises but actually falls against the pound and US dollar.
Well, isn’t 2013 turning out interesting? Far from the continuation of the debt crisis that some people feared, we’re seeing confidence return to the Eurozone in waves, with a corresponding surge in the value of the euro.
The possibility of a triple-dip recession in the UK forced the pound down against both the euro and US dollar this week, putting an end to three weeks of gains against the common currency.
Uncertainty over the impact of Hurricane Sandy and the US presidential election led investors to hedge their bets this week.
The UK pound reversed a four-month decline against the euro this week, taking sterling back to a level we last saw in early October.
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