The US dollar headed to weekly losses against most major currencies as the Eurpoean leaders at last revealed some of their plans for solving Europe’s debt problems, damping need for safer currencies among investors.
The nervousness that was building up before the plans were revealed made sure that a reaction to any tangible information about the plans of the European governments would be spectacular. The only question was would be that reaction positive or negative. As it came out, the reaction and reminded a flood, caused by a broken dam, which washed away all fears and made traders to fervently buy
The fundamental data from the US added to the optimism. The US economy grew 2.5 percent in the third quarter of this year, slightly more that forecast 2.4 percent and definitely faster than in the second quarter (1.3 percent). The unexpected decline of the pending home sales somewhat spoiled the positive mood of traders, but in general the optimistic sentiment ruled the FX markets.
EUR/USD traded near 1.4175 today as of 1:15 GMT after it rose from 1.3905 to 1.4187 yesterday, reaching intraday 1.4246 — the highest level since September 6. GBP/USD traded at 1.6086 after rising from 1.5973 to 1.6086 (the intraday high was 1.6140 — also the highest since September 6). USD/JPY fell from 76.14 to 75.94 yesterday and traded at 75.89 today.
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