London
IF you want to know which way the euro's headed, ask an oil trader.
The euro-dollar rate is tracking crude prices more closely than at any time in the past two years. The European Central Bank (ECB) gives more weight to the impact of energy prices on inflation than the Federal Reserve, so when oil started falling in the middle of last year it was one more reason for Europe to step up monetary stimulus to boost price growth.
The result: the euro lost almost 25 per cent of its value against its US counterpart through mid-March, before rallying in line with oil. Given the growing correlation, analyst predictions that crude prices won't rebound in the next several months are providing support...
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