The US dollar rose against the euro and the Swiss franc on Tuesday but was flat versus the Japanese yen and fell against other most-traded currencies. There were plenty of different factors contributing to the performance of the US currency.
US economic data was beneficial to the greenback, supporting the currency against its rivals. The dollar’s strength against the euro can be also explained by concerns about Deutsche Bank — Germany’s biggest bank that may turn out to be next Lehman Brothers, collapsing and dragging down the banking sector of the whole Europe (if not the entire world) along with it.
Yet the outcome of the US presidential debates led to a surge of risk appetite, driving investors to other currencies and away from the dollar. Additionally, comments from Stanley Fischer, Vice Chairman of the Federal Reserve muddled the outlook for Fed’s monetary policy. He said:
I don’t want to raise the interest rate too much.
He added that rates should be raised eventually but he does not know when.
EUR/USD dropped from 1.1253 to 1.1208 yesterday and traded at 1.1214 as of 00:25 GMT today. USD/JPY was at about 100.56 after opening at 100.41. GBP/USD traded near 1.3003 during the current trading session following the rally from 1.2973 to 1.3021 during the previous session.
If you have any questions, comments or opinions regarding the US Dollar,
feel free to post them using the commentary form below.