(Bloomberg) — Trading the world’s most widely used currency pair has become a thankless chore for investors.
The dollar has been hovering around its short- and medium-term averages against the euro — near $1.10 per euro — since late June. An economic slowdown in China and a commodity rout have pushed the greenback higher this quarter versus most major peers. Yet it registered the smallest move in that time against the common currency amid signs of European growth and expectations that the Federal Reserve will take its time in raising U.S. interest rates.
“I don’t think there’s any reason to bother with it, to be honest,” Daniel Brehon, a New York-based strategist at Deutsche Bank AG, said by phone, referring to the euro-dollar trade. “Our view is looking for a hike in September, but we’re all sympathetic with the idea that it’ll be very slow and it’ll be wait-and-see for six months and go again,” he said, speaking about the Fed’s approach to raising rates.
The dollar rose 0.3 percent to $1.1076 per euro at 1:03 p.m. in New York. It was little changed at 124.36 yen. The Bloomberg Dollar Spot Index, which tracks the currency versus 10 major peers, rose 0.1 percent to 1,210.23.
In the past two days, the euro has closed above its 50- and 100-day trend lines, which are at $1.1087 and $1.1044, respectively. The density of buy and sell orders at $1.10 is about equal, according to data from Commerzbank AG, leading to a stalemate.
Trade balance in the euro area, which was in deficit until 2011, rose to a surplus of 21.9 billion euros in June.