The U.S. dollar entered another day of losses versus most of the 16 main traded currencies as stocks worldwide continued to rally, raising investors’ confidence to purchase assets in emergent-markets and other higher-yielding options.
The U.S. is facing its biggest losses since last year when it reached $1.60 versus the euro as optimism is back in stock markets, pushing traders to higher-yielding assets. The Australian dollar gained versus the greenback as speculations indicate that the Australian central bank may raise interest rates until the end of the year. The euro climbed versus the dollar as the Deutsche Bank AG, one of the main German banks posted significantly improved earnings for this year’s second quarter, helping the Eurozone currency to reach the highest level versus the greenback since June. Other emergent-market currencies like the South Korean won also strengthened versus the U.S. dollar.
Low-yielding currencies like the dollar and the yen have been the most punished since risk aversion decreased, sparking an intense rally in stock markets and consequently favoring emergent-market and high-yielding currencies. It is possible that the dollar will continue to hit lows versus the euro, but its unlikely that same rates as last year’s will be repeated, since the Eurozone is still facing a number of economic problems.
EUR/USD traded at 1.42725 as of 12:16 GMT being rather neutral in the intraday comparison and facing difficulties to breakthrough at the 1.4300 resistance. USD/CAD traded at 1.0790 from 1.0834.
If you have any questions, comments or opinions regarding the US Dollar,
feel free to post them using the commentary form below.
Be First to Comment