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EUR/USD Stagnating After $116.9B U.S. Budget Deficit

September 13, 2007 (Last updated on September 17, 2010) by

This week EUR/USD rallied to the new historically high levels breaking above 1.3900 level (and staying there for some time). Possible rate cuts series in the nearest future by Fed caused this dollar fall. Almost 75% of expert currency trading analysts questioned about Fed’s decision on 18th of September are sure that Fed will cut rates at least by 0.25%. Many expect 1.00% by the end of 2007. This heats the stocks market, but cause dollar to go south against EUR, JPY and GBP.

U.S. Treasury reported its monthly statement on U.S. budget showing $116.9 billions deficit — more than $30 billions worse than expected and more than twice worse than previous year for August. Nevertheless, EUR/USD is fluctuating near 1.3900 level and didn’t jump up on this news.

Initial jobless claims for the previous week came out at 319k — better than expected 325k, but still worse than previous 315k.

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