REUTERS

Dollar top performer among major currencies in 2014

(Reuters) - The dollar was on track to end 2014 with a gain of 12 percent against a basket of major currencies, and anticipated U.S. interest rate hikes may strengthen its appeal in the new year.

This year's gain will be the dollar's largest since 2005, when it climbed nearly 13 percent.

The divergence between the U.S. Federal Reserve's path toward rate hikes and stimulative monetary policies in the euro zone and Japan has helped the dollar index hit an eight-year high this year, and is likely to remain a key theme in 2015.

Source: http://www.reuters.com/article/2014/12/31/us-markets-forex-idUSKBN0K903320141231

BLOOMBERG

ECB's Praet Warning of Oil Effects Signals Higher Chance of QE

European Central Bank Chief Economist Peter Praet warned in an interview with Boersen-Zeitung that lower oil prices increasingly risk de-anchoring inflation expectations, indicating that quantitative easing is becoming more likely.

Euro-area inflation will drop below zero "for a longer period" in 2015 amid a slide in the cost of crude, and the Governing Council "cannot simply look through" that, Praet said in comments published yesterday by the German newspaper. Inflation expectations are currently "extremely fragile" and the danger of second-round effects is "higher than usual," he was cited as saying.

Source: http://www.bloomberg.com/news/2014-12-30/praet-warning-of-second-round-effects-raises-qe-chances-for-ecb.html

BLOOMBERG

Oil Set for Biggest Slump Since 2008 as OPEC Battles U.S. Shale

Oil headed for the biggest annual decline since the 2008 global financial crisis as U.S. producers and the Organization of Petroleum Exporting Countries ceded no ground in their battle for market share amid a supply glut.

Futures slid as much as 1.4 percent in New York, bringing losses for 2014 to 46 percent. U.S. guidelines allowing overseas sales of ultralight oil without government approval may boost the country's export capacity and "throw a monkey wrench" into Saudi Arabia's plan to curb American output, according to Citigroup Inc. U.S. crude inventories are forecast to rise to the highest level for this time of the year in three decades.

Source: http://www.bloomberg.com/news/2014-12-31/oil-set-for-biggest-slump-since-2008-as-opec-battles-u-s-shale.html