According to the Forex market data on Tuesday, Euro is heading towards the biggest quarterly fall, as it is continuing its decline against Dollar for the 10th straight day. According to the share market report, the European shares also had its biggest quarterly fall.
According to the market analysts, the current economic data suggests that the U.S. and the European monetary policies will continue to deviate from each other in the coming months. According to the Forex market data, Euro has fallen 11 percent against the Dollar since January. According to the economists, a constant speculation regarding the interest rate increase by the Federal Reserve in U.S.A. and the European Central Bank`s (ECB) € 1.1 trillion quantitative easing programme is responsible for the decline.
According to the economists, Euro Zone`s declining Consumer data from Tuesday, highlighted the deflationary pressure ECB is trying to fend off. But the economists also mentioned that this is the smallest decline this year, which indicates that, goods and services prices could rise again. The economists also suggested that the standoff regarding the Greek deal is also having its toll on the Euro and the European shares. According to the market analysts, the investors are worried whether Greece can secure a new financial aid from its creditors, before they run out of cash in three weeks. It was reported that, Greece and its creditors are still trying to work out a deal on reforms for Greece.
In a statement Ian Stannard, Head of the European FX Strategy at Morgan Stanley in London said, “If we’re looking at what’s the next trigger point for another move lower for the euro … I think it will be Greece.” He then stated, “If they (euro zone policymakers) have to put in place additional measures to keep Greece in, such as capital controls, then you have a situation where the monetary union itself is under question.”
According to the Forex market analysts, Dollar was also on its track to have the best quarterly results against the basket of major currencies since 2008. According to the market data, Dollar had a 9 percent gain, as the Feds are moving towards their first interest rate hike for a long time. The Forex market experts said, Dollar got a further boost from month-end rebalancing flows on Tuesday. According to Forex traders, the Dollar Index is up 0.6 percent at 98.511. The market experts also suggested that Euro/Dollar pair may depend more on the U.S. non-farm payroll numbers, which is due on Friday.