Dollar Hits New Heights Against Euro, Emerging Currencies Reel
The US dollar has surged to new heights, pushing past last year's peaks against the euro and hitting $1.0550 in early European action. This milestone is significant as it brings the dollar closer to parity with the euro.
The yen also suffered, reaching an eight-month low, while China's yuan fell to an 8-1/2 year low. The Turkish lira and Indian rupee both hit new historic troughs, with traders suspecting that state banks or foreign exchange authorities in these countries intervened to slow the slide in their currencies.
Michael Metcalfe, head of global macro strategy at State Street Global Markets, attributed the dollar's gains to stronger data from the world's biggest economy and thinner volumes due to US traders staying away for the Thanksgiving holiday. He also warned that dislocations in emerging markets could feed back into concerns for the Federal Reserve as it considers raising interest rates.