Currency report EUR/USD above 1.30

The dollar fell to its lowest level in 19 months against the euro at $1.3105 for EUR/USD on speculation the Federal Reserve will lower interest rates early next year as central banks in Europe increase them. The dollar slid across the board, hitting its lowest level against sterling in almost two years.

The EUR/USD rose because upbeat German business confidence unexpectedly reached a 15-year high and policymakers' comments have reinforced expectations of higher eurozone interest rates going into next year, while the issue of Asian central banks' reserve diversification into the euro has come back to the fore.

The change on the international FX market caused a drop of the USD/PLN to zł.2.925, the lowest level since July 2005. The EUR/PLN rose to zł.3.83 on Friday from zł.3.79 on the first part of the week. Polish retail sales rose 13.3 percent year-on-year in October and the jobless rate fell to 14.9 percent, the first time it has been below 15 percent since 2000.

Marek Węgrzanowski

X-Trade Brokers Dom Maklerski SA