Dollar Rebounds on Undervalued Speculations

The dollar had the best performance in more than a month this Monday as speculations suggested that the current rate, mainly versus the euro, would be to low to sustain, making the greenback to erase much of the losses it posted last week versus the European common currency.
The U.S. dollar gained versus several major currencies which touched record highs due to increased risk appetite that has been affecting the dollar’s attractiveness in foreign-exchange markets during the past few months, as the world economy finally showed signs of improvements. Currencies like the Australian dollar and its New Zealand counterpart, posted the biggest losses versus the greenback as investors understood that current levels for these currencies would not reflect their trends versus the U.S. dollar, as the North American currency is also improving systematically, even if to a lesser extent than currencies from commodity exporting nations. The South Korean won, even if being an emergent market currency, extended gains as its economy grew sharply in the last quarter, according to a report.
According to analysts, the situation for the greenback is rather different than when it touched $1.60 versus the euro last year, and traders are questioning themselves about fundamental factors behind the current rates for the greenback, helping the North American currency to regain space in currency markets, as the euro could be overpriced.
EUR/USD traded at 1.4871 as of 20:38 GMT from a previous rate of 1.5013 yesterday. AUD/USD traded at 0.9155 from 0.9256.

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