The euro plunged 1.2pc against the dollar today ahead of a US earnings season that could provide support for the greenback. Expectations for a stronger open on Wall St this afternoon after the holiday weekend are punishing the euro, which has dropped to a two month low of USD1.1352. The large move may be partly due to holiday trading, as a lack of liquidity can result in irrational moves if large orders hit markets, but a positive start in New York later today will reinforce the dollar's position. US stock futures climbed sharply this morning, with Dow Jones futures rising 82 points to 9,117 and Nasdaq futures gaining 17 to 1,246.
Among the big companies due to report second quarter earnings this week are Alcoa, General Electric and Yahoo. The dollar is also benefiting from talk that low taxes and interest rates will help the US economy to pick up pace in the second half and boost corporate earnings. A combination of lower interest rates, lower taxes and a lower dollar should see US economic growth moving towards 3pc in the second half, which should underpin company profits, according to a report published today by Irish Life Investment Managers. //www.fxcentre.com