Euro Climbs To Seven Month High Against The Greenback
The euro held on to gains on Thursday after surging on Wednesday following the Federal Reserve's policy meeting.
The US central bank shocked markets by announcing that it would continue with its $85 billion per month stimulus plan. The euro leapt above $1.35 and traded at $1.3535 at 7:30 GMT on Thursday morning.
Based on recent data and remarks from the Federal Reserve and Chairman Ben Bernanke, markets were expecting the bank to cut its stimulus program by between $10 and $15 billion dollars. When it did not make the cuts, the dollar tumbled to a seven month low against the euro and stocks jumped to all time highs. CNBC reported that the US central bank said it was planning to wait for further evidence of a more stable economy before beginning to taper its asset purchases.
In a statement following the meeting, the Fed released lower, revised projections for the US economy. The bank said growth in the US economy is expected at 2 to 2.3 percent this year, down from its June forecast of 2.3 to 2.6 percent. Expectations for next year were also dropped; the bank said it sees growth of 2.9 to 3.1 percent in 2014, down from 3.0 to 2.5 percent.
In the eurozone, many are beginning to worry about Greece, which is expected to need another bailout in the near future. Analysts estimated that the country could need 11 billion euros over the next two years to stay afloat, something its eurozone peers, namely Germany, aren't happy about.
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