NEW YORK, JAN 3: The euro fell on Friday, continuing the slide that saw the currency finish out 2014 at a 29-month low against the US dollar, on expectations that the European Central Bank will soon embark on outright money-printing.
Crude prices fell in a volatile session, while equities as measured by a global index lost ground.
US stocks
Wall Street’s equity benchmark ended a choppy day barely changed, with gains in energy and high-dividend stocks offsetting declines in consumer-centered shares.
The S&P 500 on Wednesday closed out trading for 2014 with a third consecutive year of double-digit percentage gains, though it ended about 1 per cent below its all-time closing high.
Euro hits $1.2002
The euro threatened to dip below $1.20 for the first time since June 2010 on Friday, hitting a low of $1.2002.
The divergence between European and US monetary policy dominated currency markets’ thinking last year. Remarks by ECB President Mario Draghi on Friday, in an interview with German financial daily Handelsblatt, that the central bank was less likely to preserve price stability than it was six months ago added to expectations that the ECB will step in soon.
“Markets and commentators have been talking about this for ages, but to hear it from the horse’s mouth has had a clear effect on the euro,’’ said David Rodriguez, a quantitative strategist at DailyFX.com, a unit of retail FX broker FXCM in New York.
ECB policy meet
The ECB, which targets inflation at just below 2 per cent, is to hold its next policy meeting on January 22.
The greenback’s broad strengthening included a rise against the yen, to 120.74 yen. The dollar index hit 91.131, the highest level since March 2006.
Business surveys
Business surveys showed the global economy ended 2014 in a fragile state as factories struggled to maintain growth across Europe and Asia, adding to pressure on central banks to implement more stimulus. In the United States, the pace of manufacturing growth slowed more than expected in December.
The weak data weighed on equity indexes, including on Wall Street where the S&P 500 hit a two-week low before closing flat.
