The US dollar slid yesterday, but managed to rebound and advanced today even though Forex traders felt uncertainty about future monetary policy of the US central bank.
The news about withdrawal of Treasury Secretary Lawrence Summers from the race for the office of Federal Reserve Chairman shook the Forex market, igniting speculations that monetary policy will remain accommodative for a long time. Negative fundamental reports supported such outlook. The Empire State Manufacturing Survey showed that the general business conditions index edged down from 8.2 in August to 6.3 in September instead of rising as was predicted by analysts.
The greenback slumped initially on the negative fundamentals, but rebounded later. It still remains below the last week’s closing level against most majors, but far above the opening level of this week.
EUR/USD traded at 1.3326 as of 2:11 GMT today after dropping from 1.3351 to 1.3332 yesterday. GBP/USD slid from 1.5934 to 1.5894 on the previous trading session and remained near this level on today’s session. USD/JPY advanced from 99.05 to 99.24.
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