July17 – The Euro hit a record high against the dollar this week before falling back just a bit on a decrease in oil prices. According to the European Central Bank, on Tuesday, July 15 the reference rate for the Euro was 1.599 dollars. During the day the exchange rate was actually over 1.60, hitting an all-time high at $1.6037.
The dollar got a boost from the Federal Reserve, with economic data indicating that the next Fed move will probably be an interest rate hike. US consumer prices rose in June at their fastest rate in several years, and Fed officials believe that the inflation pressures will likely lead to a rise in interest rates.
Concern about the US financial markets and the ability of mortgage giants Fannie Mae and Freddie Mac to stay afloat drove the dollar to its low against the Euro. Until it actually happens, though, there are doubters that the Fed will raise interest rates. There are concerns about the health of the economy in general, so raising interest rates will be difficult if things are not going well.
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