The U.S. dollar was rising as the European crisis increased the demand for the safe currencies, but recently began to decline as the focus of the concerns turned to the U.S. themselves. While at the end of this week the greenback rebounded against some other major currencies, the future of the U.S. currency looks uncertain.
The dollar will likely weaken in the near future unless some good news from the U.S. prove the strength of the currency. The lower number of the jobless claims may spark some optimism, but other than that there is nothing to be hopeful about. In case the speculations that the European economy is stronger than it looks would prove true, the greenback will certainly fall further.
The moves of the EUR/USD currency pair can be expected to be volatile, as the sentiment shifts according to the news from Europe and the U.S. For now the shared European currency shows trend to rebound as there are more bad news from the U.S. than from Europe. On the other hand, the gains of the euro can be restrained by the uncertainty, brought to the global markets by the weakness of the U.S. economy. GBP/USD may experience some volatility too as the traders are uncertain yet what influence the budget cuts will have on Britain’s economy, so we should wait until picture becomes clear here to predict where the currency pair will go. The Japanese yen are likely to profit from the concerns about the U.S. and global economies and continue its rally against the greenback.
The dollar is nowhere near parity with the euro. It’s unlikely that greenback will go above 1.20 per euro in the near term. For now it hasn’t fallen far beyond 1.30 per euro level, but we should wait to determine if this would be the support level. Against the sterling the greenback wouldn’t probably weaken beyond 1.5475 per pound level and might trade near 1.5150 per pound. The dollar will likely be traded near the current level against the Aussie, while against the loonie it may rise to 1.0675 before dropping again.
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