The euro seemed set fair for a rally against the dollar this year, but so far this has failed to materialise.
With America’s central bank, the Federal Reserve, calling a halt to interest-rate rises, the single currency should be strengthening against the dollar.
Instead, it seems trapped in a fairly narrow range of $1.12 to $1.14, and is about ten cents lower than a year ago.
Dollar shrugs off negative factors
This morning, the euro traded down 0.13% at $1.1245, against $1.1271 a month ago, on 26 March.
Three months ago, the single currency was worth $1.1381 on 23 January, and on 23 April last year, it stood at $1.2209.
The passing of control of the House of Representatives from Mr Trump’s Republican Party to the Democrats heightens political tension and uncertainty in Washington, while unresolved trade problems with China would normally be seen as a sell signal for the dollar.
Meanwhile in Europe, fears of a budget clash between Italy and the European Union have subsided, EU solidarity over the Brexit issue has been maintained, and French President Emmanuel Macron is enjoying a boost to his popularity from his handling of the fire at Notre Dame Cathedral in Paris.
Even down against sterling
But still the euro is losing ground against the dollar. One key reason for this may be doubts about the prospects for the euro-zone’s “locomotive” economy, Germany.
Despite strong retail sales and construction activity, official growth forecasts for this year have been cut in half, from 1% to 0.5%, as manufacturing treads water.
The overall April figure was 47.8.
Since its launch in 1999, the euro has had a complicated relationship with the dollar, with the exchange rate affected by factors such as interest-rate disparities and the difficulties of trying to manage one currency for a group of varied national economies.
The euro has weakened also against the yen, losing 0.17% this morning to 125.805 yen. A year ago, on 23 April 2018, it was worth 132.695.
It has even managed to lose ground against sterling, despite the UK’s Brexit deadlock. It was 0.20% down this morning at £0.8657, and a year ago, on 23 April 2018, it stood at £0.8758.