Last week the euro posted its worst week of 2017, and the common currency continued its struggle during Monday’s Asian trading session after deposed Catalan President Carles Puigdemont called for peaceful “democratic opposition” to the Spanish government’s takeover of the area after the regional parliament’s unilateral declaration of independence. Puigdemont was fired by Spanish prime minister Mariano Rajoy, and regional elections have been called for December 21. Puigdemont could potentially run for re-election, though the Spanish government has threatened to jail him for his role in Catalonia’s independence.
The euro was trading at $1.1612 as of 2:08 p.m. HK/SIN. Also putting pressure on the euro was the European Central Bank that announced on Thursday its intent to extend bond purchases into September 2018 while reducing its monthly purchases by 50 percent starting in January 2018. The announcement prompted analysts’ concern that the ECB would not raise interest rates until 2019.
The dollar also struggled early on Monday, retreating from last week’s three-month highs but remaining in range. Data released on Friday showed that the U.S. economy grew at a 3.0 percent annual rate in the third quarter of 2017, above the predicted 2.5 percent growth forecast by Reuters. The positive data increased expectations for another interest rate hike before the end of the year.
The dollar was trading at 113.63 yen, down 0.04 percent. The greenback was also down 0.03 percent against the Swiss franc. Also weighing on the dollar is the question of who President Trump will nominate as the new chair of the Federal Reserve once Janet Yellen’s term expires in early 2018. The announcement of Trump’s nominee is expected later this week.