The Dollar and Euro Move Near Parity

Thanks to the start of European QE, and the prospect for higher rates soon in the U.S., the dollar has been surging against the euro. Ten months ago, one euro was worth $1.39. Today that same euro gets you just $1.06. That’s a 12-year low. Now people are wondering if we’ll hit parity soon.

Interest rates in Europe are becoming a joke. The 10-year bond in Germany just fell to 0.2%. In other words, you get 2% combined for the entire life of the bond!

Adding to the dollar’s rally is next week’s Fed meeting. The talk on Wall Street is that the Fed will abandon its “patient” language which will set the stage for rate hikes. The last time the Fed raised interest rates was June 2006.

Posted by Eddy Elfenbein on March 11th, 2015 at 9:25 am

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