Dollar Falls on Fears That Recession Deepens

The U.S. dollar declined today against the other major currencies and especially against the euro as the traders expect weak macroeconomic reports to continue coming out from the United States, showing that the world’s biggest economy is in the worst situation of all the developed countries.
The instability factor in the Middle East with the conflict raging between Israel and Hamas in the Gaza Strip is pushing the oil prices up, pressing heavily on the dollar, which often moves in the reverse with the oil.
This week the reports on the consumer, manufacturing and services indexes of confidence are scheduled for release. Analysts believe that this data will strongly disappoint traders, signaling a deep recession in U.S.
On the other hand the week will be very slow in trading as the New Year will keep the usual Forex activity very low. The breakouts from the previously set trend ranges are very improbable and it’s not recommended to enter the market at this time.
EUR/USD rose from 1.4071 to 1.4248 as of 9:03 GMT today. USD/JPY declined slightly — from 90.65 to 90.50, while GBP/JPY went up insignificantly — from 132.77 to 132.84.

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