For over the last few years the difference between dollar and euro has been lessened remarkably that has been strengthened now when the president of European Central Bank, Mario Draghi dropped another indication that he is about to pour more money into the European economy.
Draghi, at a meeting of banking congress in Frankfurt revealed that ECB is now ready to act fast to boost Europe’s nonexistent inflation. He, in that meeting expressed his strong intention to do whatever they need to raise inflation as quickly as possible.
According to the Draghi’s statement his dovish remarks sent the euro plunging and it lost 0.5% against the dollar and the updated news is that trading is now doing at around $1.07.
Now, there are two options left that Draghi can proceed on and the first one is that he can cut the already negative interest rates even more deeper otherwise he can expand the bank’s money-printing program. The ECB is now buying bonds a month that is worth of 60 million euros
On the other hand , the Federal Reserve is expected to start raising interest rates in the America Whereas the first hike recorded in last nine years could come as soon as in December.
That clearly indicates that Europe and Fed will be going in opposite directions. It slightly predicts on December 3, euro will be weakened and on the contrary dollar will be strengthened. Moreover, Fed could shape the dollar even bigger boost most possibly on December 16.
Historically, dollar last time matched the euro in the level of value just 13 years ago. At opposite, dollar was in its peak in July 2008, and then the euro was worth $1.60. The analysts of Goldman Sachs are expected to happen this before the ending of this year. Whereas, others experts say it may could happen in the early of the next year.
After all such happening will make happy to the common American while they can import goods in more cheaper rate and travel abroad less than before. But on the other hand it will make difficult to the American multi companies who have trade outside of America, especially in Europe.