The dollar continued its assault on the euro Wednesday, surging to another 28-month peak amid speculation the European Central Bank will soon take unprecedented steps aimed at reviving the region’s economy.
With European powerhouse Germany mired in a rough patch and on the verge of a deflationary spiral, analysts say it is only a matter of time before the ECB embarks on full-scale quantitative easing.
The Federal Reserve, meanwhile, is expected to start raising rates in the U.S. following a series of seemingly successful QE programs.
The dollar rose to $1.21 versus the euro, with a yearly gain of nearly 12 percent taking the buck to its highest since mid-2012.
Gains were less pronounced against the sterling, but the dollar did manage a 6 percent on-year advance to sit at $1.5590 this afternoon.
A dramatic advance late in the year took the dollar to a 7-year peak around Y122 versus the yen. Japan’s government also announcement massive stimulus measures of late, having lost patience with their anemic economic growth.
In economic news on the final day of 2014, pending home sales saw a slight improvement in the month of November, according to a report released by the National Association of Realtors on Wednesday, with pending sales rebounding from the drop seen in the previous month.
Chicago-area business activity grew at a notably slower rate in the month of December, according to a report released by MNI Indicators on Wednesday.
MNI Indicators said its Chicago business barometer dropped to 58.3 in December from 60.8 in November, although a reading above 50 indicates continued growth. Economists had expected the barometer to drop to a reading of 60.1.