The Dollar ended the week losing against several major currencies after China declared this Friday that a supranational currency should be created for regulating international trade, damping demand for the greenback, which is currently the world main reserve currency.
The euro posted the sharpest gains against the U.S. currency after Peoples Bank of China stated that the International Monetary Fund should provide alternatives for its members to manage their foreign currency reserves, adding to the already relevant tension around the dollars long term future. A rally in Treasuries during the last few days pushed the yield on the benchmark 10-year note down to a level as low as the ones during the worst moments of the global slump, last year, decreasing returns and consequently reflecting negatively on the U.S. currency.
Economists affirm that it is inevitable to avoid the fact that as long as the dollar status as main world currency will be questioned by governments around the world, traders will be not confident to provoke a rally for the greenback, contrarily, it is likely that the dollar will go further down if the uncertainty continues to raise. Currency strategists are split on predictions for the U.S. dollar, and the following weeks will tend to be decisive to determine which direction the greenback will take.
EUR/USD closed the week at 1.4061 raising from 1.3955 on Thursday. USD/JPY closed at 95.17 falling from 95.77.
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