The U.S. currency rebounded this week from a twelve-month low versus the euro and several other currencies as concerns regarding the global economic situations reappeared today, increasing risk aversion and consequently helping the greenback to gain in foreign-exchange markets.
Toyoo Gyohten, a former currency official with influence in the Japanese government affirmed today that the U.S. dollar should remain as the global reserve currency, helping the dollar to gain in a pessimistic scenario that increased risk aversion, after Russia cut its national interest rates to spur the country’s economy, creating speculations that the situation is still far from optimal in the biggest European country. The dollar gained versus most of the main currencies today, specially the euro, but it failed to contain the Australian dollar rally, which is being fueled by speculations regarding interest rate hikes which could occur before the end of the year, suggesting that the South Pacific nation is one of the most resilient from the global slump.
A great part of the trading community is already waiting for rate hikes and placing their bets according to that, but today, Russia surprised the world cutting interest rates, bringing back uncertainties and risk aversion, which is favorable for the greenback. There is also a sentiment that the dollar could be undervalued, and we may witness a rally for the greenback in the short-term as a correction for this disparities.
EUR/USD traded at 1.4552 as of 11:03 GMT from a previous rate of 1.4651 yesterday. USD/JPY traded at 89.93 after touching 88.47 yesterday.
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