The Euro and US Dollar exchange rate is flat at 10am London time.
The EURUSD rate is unchanged with 1 EUR fetching 1.4322 USD.
While there is nothing of consequence happening at present in the Euro Dollar market many investors and corporates are looking out for FX predictions for the coming year.
Duncan Higgins, senior analyst at Caxton FX provides The Economy News readers with some insight for the Euro Dollar:
"The currency that could be on course to sustain its recent gains is the US dollar, with the “risk on, risk off” status of the US currency showing signs of diminishing.
"With low interest rates in the US, the greenback had been broadly sold for more profitable assets when risk appetite was high. However, with an increasing range of positive data emerging from the US (notably employment data at the end of last month), investors are starting to hold onto the dollar. They are now betting that the Fed may raise rates sooner than they had previously suggested."
Should US data continue to improve, the nascent rally in the dollar could accelerate, pushing the euro price down to $1.40 in the early part of next year.
If the outlook toward the US recovery remains buoyant we may see a dollar/sterling price back below $1.60 by February.
The disadvantages of the high euro-dollar exchange rate may finally be starting to weigh on eurozone growth. The rebound in the 16-nation union had been remarkably resilient this year, despite this appreciation.
However, as 2010 approaches data has been less encouraging, which could signal that the eurozone economic recovery is running out of steam. Indeed recent production figures showed the first monthly contraction since April, signalling that growth in the eurozone economy may stumble slightly in the final months of this year.
