The U.S. dollar rose after extending once again its record high for 2009 after China missed slightly its quarterly growth forecasts, and economic stimulus in the country will continue for a certain amount of time, suggesting the country is not so recovered as previous expected.
The euro fell below $1.50 against the dollar after touching the highest rates in 14 months in a movement that can be interpreted as corrective, since stocks fell globally, helping the dollar to gain the most versus commodity linked currencies like its Australian counterpart, and also emergent market options in Asia like the South Korean won, and in Latin America like the Brazilian real. The dollar also gained against the Swedish krona, after the Riksbank, Sweden’s central financial institution maintained interested rates at an all time record low, showing that the Nordic nation still needs the support from the government to expand its faltering economy.
Analysts suggest that today’s movement was mainly fueled by a risk averse day in stocks, as the dollar declined several days in a row, today corrections are profit taking are being made by some investors, leaving a breather for the greenback. It is unlikely that the dollar will revert its losing trend on the mid-term, as the Federal Reserve has expressed no concerns regarding a weaker currency.
EUR/USD traded at 1.4989 as of 11:59 GMT after touching 1.5046 yesterday. AUD/USD traded at 0.9229 from 0.9328.
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