The U.S. dollar had a bullish performance today and gained considerably versus the euro and the yen as speculations rose that the Fed will start a process of lifting economic stimulus introduced during the worst moments of the global slump to revive the U.S. economy.
The dollar benefited today from a business activity report that came much above forecasts, interpreted as another solid evidence that an economic recovery is on the way in 2010 for the U.S., which could prompt the Federal Reserve to lift stimulus and raise its benchmark interest rates, currently maintained at an all time record low. The dollar has gained almost 5 percent this month versus the euro, as the European common currency is being hurt by some of its member countries’ financial struggles, specially Greece during the past two weeks, after it had its credit rating downgraded by an important financial institution.
Market sentiment shifted towards the dollar, and it’s likely to remain bullish in 2010, according to analysts. Consecutive positive reports in the U.S. will likely to change Fed’s monetary policy sooner or later, and the next move is likely to be hawkish, which would set the dollar to further gains next year.
EUR/USD traded at 1.4341 as of 17:33 GMT from 1.4398 in the intraday. USD/CHF traded at 1.0360 from 1.0324.
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