The euro had its biggest monthly gain since April as higher-than-projected inflation spurred speculation the European Central Bank will refrain from additional monetary stimulus at a meeting next week.
To foreign-exchange strategists, 2014 was to be the year the dollar broke free from the Federal Reserve’s currency-depressing policies and appreciated the most since the global financial crisis. Then came the snow.
Rather than a euro failure, an orderly Greek exit from the currency has Nobel laureate Joseph Stiglitz and Nomura Holdings Inc. chief strategist Jens Nordvig predicting a stronger and more stable monetary union.
The dollar traded at almost the weakest level in two years versus the euro after U.S. consumer sentiment fell to a 10-month low, adding to bets the economy is struggling and the Federal Reserve will delay cutting stimulus.
The euro, the second best-performing major currency this year, has increased so much that it will weigh on economic growth in the euro region going into 2014, according to Nomura Holdings Inc.’s Jens Nordvig.