Dollar Falls 1.6%, Most Versus Euro Since 2006

September 12, 2008 by · Leave a Comment
Filed under: Economic News 

With all of these bad economic news and inflation via bailouts it was very curious that the USDX index rallied from a low of 70ish to 80 in just about a month’s time. You would think that this news would be to the detriment of the U.S. dollar. The major media outlets were pushing the “Demand Destruction” theme and that seemed to of push many investors out of the commodities and into other stores of value namely the Dollar and some large cap stocks and certain bond issues among others.

Today we had a pretty severe correction in the dollar and if we keep seeing this type of activity around 80 them we should see the technicians call that a ceiling in the trading pattern. Today Roubini said that he felt we are just starting a “very severe banking crisis” in a video interview on Bloomberg.

Article:

The dollar fell the most against the euro since January 2006, pushing it down from a one-year high, on reduced demand for the greenback as a haven.

The euro, the Brazilian real and the pound advanced versus the yen as Lehman Brothers Holdings Inc. negotiated with potential buyers, encouraging investors to reduce bets against higher-yielding assets. The dollar also declined versus the euro as traders increased speculation that the Federal Reserve will cut borrowing costs by the end of the year.

“The market has been moving toward unwinding some of the recent trends,” said Shaun Osborne, chief currency strategist in Toronto at TD Securities Inc., a unit of Canada’s second- biggest bank. “There’s a lot of uncertainty about where we will be Monday morning.”

Click Here to Continue Reading

Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!