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Dollar Plummets to 11-Month Low against the EUR
Tuesday, 8 Sep 2009 18:02:47 GMT
The U.S. Dollar plummeted to near a year low vs. the EUR, as global stocks rallied. As a result of the weak Dollar, Crude Oil rose dramatically. Also, Gold surpassed $1000, as traders seek a currency hedge from a weak USD and potential creeping inflation. The USD also fell against the other five most traded currencies.

The EUR/USD pair soared by nearly 200 pips to the 1.4520 level. The USD slipped by a staggering 170 pips vs. the GBP to 1.6519. Also adding to the GBP's gains was optimistic manufacturing data that was published from the British economy. What's more, as the world's leading economies improve, the greenback seems to weaken.

Looking ahead to late night trading, we can expect the GBP, EUR and JPY to continue to hold onto their gains against the USD. In fact, there is a possibility that the greenback will continue declining, due to a lack of confidence in the U.S. currency. Therefore, if you want to make some end-of-day profits now, open your USD positions as soon as possible.

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USD Down 3.7% against the EUR this Year
The Dollar Index traded near the weakest level in almost a year against the currencies of six major U.S. trading partners as record low borrowing costs encouraged investors to sell the greenback and buy higher-yielding assets. The index was at 77.002, after dropping yesterday as much as 0.7% to 76.803, the lowest level since Sept. 26, 2008.

The USD continues to suffer downward pressure as investors continue to anticipate that the global economy is emerging from recession, which makes them more willing to sell Dollars and invest in riskier currencies and commodities. At the same time, while the Fed's program helped pull the U.S out of the recession, it also pumped a lot of Dollars into the economy and with the continuous rise in the unemployment rate it is unlikely the Fed will raise interest rates any time soon.

Abundance of supply of USD, and a very low return on Dollar denominated assets due to the low interest rate, makes the greenback highly unappealing to investors; possibly replacing the JPY as the carry trade currency of choice.

The release of the Trade Balance and the Unemployment Claims figures is due to be released today at 12:30 GMT. With the unemployment numbers expected to show some improvement, a worse than expected result might help reverse some of the Dollar's recent losses.

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Crude Oil Drops Below $69 a Barrel
Before the trading week closes, crude oil saw a sharp decline, sliding from $72.80 to $68.80 a barrel. Crude oil failed to breach through the $72.90 level, which marked this week high, and the bullish trend rapidly reversed.

This week's trading session was largely impacted by the weak Dollar. The greenback saw its longest losing streak since March, as a better-than-expected result of the Preliminary University of Michigan (UoM) Consumer Sentiment report encouraged investors to sell the Dollar and buy higher yielding assets overseas. The Preliminary UoM Consumer Sentiment rose to 70.2 this month from 65.7 in August beating expectations for a 67.2 end result.

As for the following week, many impacting data is expected from the major economies. Traders are advised to focus their attention to the German Economic Sentiment, the U.S. Retail Sales indices, the U.S. Consumer Price Index (CPI) and the U.S. Unemployment Claims. It seems that a batch of positive data from the American economy might have the potential to reverse the current bearish trend.

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Dollar Down to Weakest Level of 2009
The U.S. Dollar fell versus the EUR but clung to small gains against other major rivals on Monday. This came as traders turned their focus to data coming this week and as the EUR and Yen hit technical levels that triggered some buying. The market focus now shifts to a slew of U.S. indicators to be released between Tuesday and Thursday that could determine whether the Dollar will continue to trade lower, or experience a pause.

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Dollar Falls from Daily Highs
During the New York trading hours, the Dollar reversed course, shedding most of its morning gains against the EUR, but still remained in the black against the Yen. The EUR/USD dropped as low as 1.4610 but later regained ground. The USD/JPY climbed to the 92.51 price level but failed to break the resistance line.
Dollar Falls from Daily Highs

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Dollar Declines on Global Economic Recovery
The USD has declined significantly today, as the global economy led by the U.S. continues to show positive signs of recovery. As a result, U.S. and European equities are trading higher. This equities rally was initiated by UBS and Goldman Sachs saying that better earnings will push stock prices higher. All this seems to have added to the downward trend of the USD today, as investors become more confident, and raise the stakes, which has led to higher risk taking today. Therefore, riskier currencies such as the GBP have gained ground. Also, volatile commodities, including Crude Oil and Silver have also made big gains today.

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EUR/USD Hits Yearly High of 1.48!
The EUR/USD climbed to a 1-year high today, spiking upwards towards the 1.48 price level. The EUR continues to be the leading beneficiary of recent market outlook with uncertainty surrounding Britain, Japan, and the United States. The Euro-Zone, while not making leaps and bounds in any one category, nevertheless remains bullish from the growing attitude towards risk.
Gold prices also fell below $1,000 an ounce for a short while, but no investors jumped into the sell trend and it came back up. Gold is currently trading near $1,015 an ounce. Silver experienced similar behavior, since its trends tend to mirror Gold's, and it now trades near the $17 price level.

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USD Up on Fed Statements; Oil Sinks on Demand Concerns
The US Federal Reserve yesterday upgraded its assessment of the U.S. economy, saying growth had returned after a deep recession. As expected, the Fed kept its target for its federal funds rate set at a range of zero to 0.25%. The previously weakened Dollar had been propping up commodity prices. Following the US Crude Oil Inventory report yesterday, oil prices dropped nearly 4% to below $68.50 a barrel. The Fed statement, which pushed the US Dollar up, only helped extend these decreases in oil prices.

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U.S Unemployment Claims Unexpectedly Drop
The USD remained higher against most of its major counterparts Thursday except the Japanese yen, continuing to prove that, for the time being, this is the solid currency that traders can rely on to provide them with steady profits. The EUR/USD stopped the upside move at good resistance level of 1.4830 and from then on it fell more than 180 points all the way down to 1.4650 level. Risk aversion continues to give the Dollar strength and that is likely to continue until we see signs of stabilization. Also, the USD saw gains against the GBP.

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The Dollar Rebounds Against the Yen; Higher versus EUR
The U.S. dollar rose against the EUR and a basket of currencies despite a rally in U.S. stocks. The Dollar moved as optimism about an economic recovery has prompted investors to scoop up higher-yielding assets. The USD gained for the 2nd day against the EUR as evidence economies have yet to shake off the worst effects of the global recession spurred demand for the safety of the U.S. currency.