US currency converter takes lead form USA
The US dollar remained well supported against the euro as market players turned their attention to interest rate decisions in the euro zone and the UK later this week, as well as Friday's key US jobs data release.
There has been little in terms of data and events for the market to get its teeth into yesterday, though the dollar has been broadly supported by strong gains on US stock markets, coming well off its recent record lows against the euro.
The euro has also succumbed to profit-taking, especially as its very high level is leading European politicians to start making noises about the potentially damaging effect for exporters of such a strong currency.
Euro/dollar has corrected lower from Monday’s 1.4280 high, first, the market has traded euro/dollar long for some time. Secondly, the strong equity market rally has reduced expectations of the Federal Reserve cutting interest rates aggressively. Third, European resistance concerning a further dollar decline has strengthened.
Even the usually reticent European Central Bank chief Jean-Claude Trichet was last night persuaded to highlight that the US is still holding on steadfast to its strong dollar policy.
France's finance minister Christine Lagarde, went a step further meanwhile and was cited in a French newspaper as saying that she is preparing a joint euro zone initiative on the euro's exchange rate. The aim would be to reach some kind of agreement at the next meeting of G7 finance ministers.
Attention will now turn to Thursday's rate decisions. Both the Bank of England and the European Central Bank are expected to leave rates on hold, but focus will centre on Trichet's accompanying press conference to see whether he holds on to his hawkish stance.
Also firmly on the radar are Friday's key US jobs data, where a strong reading is much more likely to provoke a reaction for the dollar than a weak one, given that the currency is now viewed as oversold.
If payrolls on Friday were to significantly exceed expectations, then a short squeeze in the dollar could help push euro/dollar lower. Likewise, a consensus or softer-than-expected payrolls this Friday would probably help consolidate the dollar at current low levels for now.
Elsewhere, the dollar's recovery came in tandem with gains in the yen at the expense of the higher-yielding Australian dollar. The recent recovery in risk appetite has encouraged investors to move back into carry trades, borrowing in low yielding currencies such as the yen in order to invest in higher yielding assets elsewhere, a trend which has seen some correction yesterday.
The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
There has been little in terms of data and events for the market to get its teeth into yesterday, though the dollar has been broadly supported by strong gains on US stock markets, coming well off its recent record lows against the euro.
The euro has also succumbed to profit-taking, especially as its very high level is leading European politicians to start making noises about the potentially damaging effect for exporters of such a strong currency.
Euro/dollar has corrected lower from Monday’s 1.4280 high, first, the market has traded euro/dollar long for some time. Secondly, the strong equity market rally has reduced expectations of the Federal Reserve cutting interest rates aggressively. Third, European resistance concerning a further dollar decline has strengthened.
Even the usually reticent European Central Bank chief Jean-Claude Trichet was last night persuaded to highlight that the US is still holding on steadfast to its strong dollar policy.
France's finance minister Christine Lagarde, went a step further meanwhile and was cited in a French newspaper as saying that she is preparing a joint euro zone initiative on the euro's exchange rate. The aim would be to reach some kind of agreement at the next meeting of G7 finance ministers.
Attention will now turn to Thursday's rate decisions. Both the Bank of England and the European Central Bank are expected to leave rates on hold, but focus will centre on Trichet's accompanying press conference to see whether he holds on to his hawkish stance.
Also firmly on the radar are Friday's key US jobs data, where a strong reading is much more likely to provoke a reaction for the dollar than a weak one, given that the currency is now viewed as oversold.
If payrolls on Friday were to significantly exceed expectations, then a short squeeze in the dollar could help push euro/dollar lower. Likewise, a consensus or softer-than-expected payrolls this Friday would probably help consolidate the dollar at current low levels for now.
Elsewhere, the dollar's recovery came in tandem with gains in the yen at the expense of the higher-yielding Australian dollar. The recent recovery in risk appetite has encouraged investors to move back into carry trades, borrowing in low yielding currencies such as the yen in order to invest in higher yielding assets elsewhere, a trend which has seen some correction yesterday.
The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
Labels: currency converter, US Dollar
posted by Wise Money @ 11:14 AM
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