The euro is trading near its lowest level against the dollar in nine months as investors bet that the eurozone will maintain lower interest rates and have a slower economic recovery than the U.S.
The policy split means investors may get paid more to hold U.S.-dollar assets like Treasurys than they would eurozone assets, where government bonds in Germany and some other countries already have subzero yields.
“The idea is that as we slowly get into a bit more of a mature phase of the recovery in developed markets, that central banks are going to start tightening policy but the ECB is going to sit right back at the end of the queue,” said Simon Harvey, senior foreign-exchange market analyst at broker Monex Europe. “You’re not going to get that yield there.”To Read the Full Story
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