Values of the euro and dollar have been erratic this past week. On April 18, the euro dropped more than 1% against the dollar, the largest drop in a day since November amid troubles with the Greek debt. On April 21, however, concerns about United States fiscal and monetary policy sent the euro back up to a sixteen-month high. The euro was at $1.4553, while the UK pound was at $1.6516, also a high.
Strategist Michael Sneyd said in a statement to the Wall Street Journal, “Markets are going for the higher yield, higher growth currencies by selling dollars.”
The Federal Reserve’s monetary policy has incited traders to turn to other currencies, like the euro and pound, against dollars. Furthermore, problems with America’s fiscal policy also have investors worried.
According to Reuters, analyst Omer Esiner said that “continued concerns about America’s bloated deficits and policymakers’ inability to agree on the difficult measures needed to address budgetary challenges remain a key risk for the dollar.”