Dollar Rises Against Euro & Pound, Falls vs. Yen

The U.S. dollar rose today against the euro and the Great Britain pound on the speculation that the fiscal crisis in the Euro-zone will boost demand for the long-term U.S. financial assets; the U.S. currency dropped against the Japanese yen as the unfavorable reports diminished the optimism for the U.S. economic recovery.

The diversification resulted in the depreciation in the previous year, causing concern that the greenback will lose its status of the safe currency. With the debt crisis raging across Europe the trend has shifted towards the reverse diversification, making governments, like China and Russia, and the investors turn to dollar in desire for the safety. The good economic data, like the increasing number of the housing starts, supports the dollar’s strength.

Not all news were good for the currency though. The producer price index and the number of the housing starts dropped, suggesting that the pace of the economy’s rebound in the U.S. may become slower.

EUR/USD traded today at 1.2257 as of 18:01 GMT after it opened at 1.2394. GBP/USD traded near 1.4366 after opening at 1.4472. USD/JPY dropped to 92.19 from the opening price of 92.56

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