Market Overview: Euro Tests Its Lowest Level Against the Dollar in 4.5 Months

Foreks - ING stated that the Euro has fallen to its lowest level against the dollar in four and a half months and may struggle to recover as interest rate differentials move against the exchange rate. ING analyst Chris Turner emphasized that short-term interest rate differentials between the Eurozone and the U.S. continue to be "extraordinarily wide" in favor of the dollar. According to Turner, it seems unlikely that Germany's financial situation will fully improve before the federal elections, necessitating further interest rate cuts by the European Central Bank to support the Eurozone economy. ING expects the ECB to cut rates by 50 basis points in December. According to ING, only position adjustments this week will allow the Euro to strengthen, but gains will be limited. The Euro dropped to 1.06785 dollars.