The US dollar is declining all other major currencies except the Great Britain pound as the consumer optimism rises better than expected and the US stock market rallies.
The greenback fell for the sixth day in a row against the single European currency today and posted a fifth negative daily result against the Japanese yen, while standing strong against the pound sterling for the third day. Ironically, the main trigger for the dollar losses today was the positive consumer confidence report from The Conference Board that showed a reading of 65.4 for April.
As a result, the US stock market rallied today, reducing appeal for the “safe haven” dollar. Dow Jones Industrial Average index added 0.96 percent. While many currencies are positively correlated with their respective stock markets, the US dollar usually reacts negatively to gains in equity.
Another negative factor for the US dollar is the FOMC statement that is scheduled for release tomorrow. Some analysts say that no matter what will be decided during the Board of Governors meeting — either continuation of the bonds buying program or the opposite — the dollar is going to be a loser. In the first case — because of the inflation fears, in the second — because of the poorly performing economy and unemployment.
EUR/USD grew from 1.4578 to 1.4631 as of 18:43 GMT today; it had risen to 1.4656 during two hours before — new high since December 2009. USD/JPY fell from 81.81 to 81.65, while GBP/USD decreased from 1.6490 to 1.6479.
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