Euro exchange-rate key in central bank `currency tennis'

Year end may bring new era of divergence in monetary stances

Janet Yellen and Mario Draghi will end the year shaping each other's decision making.

That's what some economists are saying a day after European Central Bank President Draghi all-but committed to fresh stimulus for the euro-area in December. The same month was already a focal point for investors debating whether Federal Reserve Chair Yellen would raise the U.S. benchmark for the first time since 2006.

The upshot is that the final month of the year, traditionally a time for winding down and vacations, will be the scene for two of the biggest policy decisions of 2015, with repercussions for currencies, stocks and bonds around the world. The outcome will either be the long-anticipated split in transatlantic policy or a united extension of easy money.

How the euro trades against the dollar in the coming weeks is a key factor for investors trying to gauge the outcome. Europe's shared currency tumbled to a two-month low on Thursday after Draghi's stimulus signal.

"There's this game of currency tennis between the Fed and the ECB and it will continue play out for while longer," said Nick Kounis, head of macro research at ABN Amro Bank NV in Amsterdam.