US Dollar will continue to drop against Euro – foreign experts
Foreign experts forecast that the US Dollar will continue to drop against the Euro during 2007 after it finished the year with USD 1.31 per EUR 1. Some experts consider that the European currency will reach USD 1.4, a level that has never been registered in its 7 year history. The situation on the external market is directly influencing the evolutions on the internal market. When settling the exchange rate of MDL/EUR the National Bank of Moldova takes into consideration the evolution of the European currency on the external markets. Therefore, it is not excluded that the national currency will continue to depreciate against the Euro on the internal market. According to the foreign press, cited by Info-Prim Neo, the U.S. currency traded at USD 1.3262 against the Euro in London on Wednesday, January 3. This means that the US Dollar continues to regress against the main currencies while many countries reduce the share of the US dollar in their foreign currency reserves. “This extended period of the dollar’s weakness will continue in January” says Kamal Sharma, currency strategist in London at the Bank of America. “The market expects the next set of significant data”, he added. According to Clifford Bennet, chief strategist at FxMax, a Sydney-based currency forecasting company, “in light of the poor results of the American economy, the European currency will strengthen, while the US Dollar will become weaker in the next months.” Another concern is the fact that the countries with significant reserves of US currency decided to give up it in favour of the Euro. The last countries that used this method were the United Arab Emirates that followed the example of Russia, Switzerland and Venezuela. They changed a significant part of their reserves into Euro last months. China and Iran say they might undertake the same actions.