Dollar changed vs euro on stimulus deal
The U.S. dollar was little changed against the euro in a volatile session on Wednesday amid news the U.S. Senate and House of Representatives will be able to bridge their differences on economic stimulus plans.
U.S. stocks .DJI rose on the news late in the New York session amid rising risk tolerance, reducing the demand for the dollar as a safe-haven currency.
“We are seeing stocks jump on the stimulus deal and in turn that takes some of the demand for the dollar as a haven off the table a bit,” said Matt Esteve, a foreign exchange trader at Tempus Consulting in Washington. “Having both Senate and House reaching an agreement is obviously a positive for the U.S. economy.”
The dollar was last up 0.2 percent against the yen at 90.45 yen <JPY=> after going as high as 90.75 yen. The euro was last at $1.2893 <EUR=> against the dollar, little changed but off the session low of $1.2834.
Forex Dollar:- Jumps vs euro biggest daily gain in 2 months
The U.S. dollar jumped against the euro on Friday, posting its biggest daily gain in almost two months, after traders said the greenback’s slump earlier this week may have been overdone.
The dollar also gained ground after the U.S. government said it will provide loans to Detroit carmakers crippled by the economic downturn. The Bank of Japan’s interest rate cut to nearly zero also lent support to the greenback.
“We’ve seen an extraordinary amount of volatility over the last few sessions and part of that is due to the fact that it’s year-end and month-end for a lot of banks and institutions,” said Steven Butler, director of foreign exchange trading at Scotia Capital in Toronto. What this ECB move did was, for all intents and purposes, it knocked down the euro’s interest rate advantage versus the U.S. So it made it less attractive to hold euros,” said Ronald Simpson, managing director of global currency analysis at Action Economics, in Tampa, Florida.
In late afternoon trading in New York, the euro was down 2.8 percent at $1.3887 after hitting a low of $1.3826, according to Reuters data. The euro hit $1.4720 on electronic trading platform EBS on Thursday, its strongest since late September.
Despite Friday’s pullback, the euro is on track post a weekly gain of more than 3 percent against the dollar.
The euro fell 3.1 percent to 123.79 yen .
Analysts said once the year-end flows are out of the way and investors return to their allocation for the coming year, the worsening economic backdrop in the eurozone should come back to weigh on the region’s currency.
“The European Central Bank is not done lowering rates yet,” said Greg Salvaggio, a vice president for trading at Tempus Consulting in Washington D.C. “That in itself is a negative for the currency.”
Salvaggio added he expects the euro to trade in a range of $1.35-$1.37 until the end of the year.
-
Recent Posts
- Thar Coal Reserves Can Turn Around Pakistani Fortunes
- Non-eligible Candidate Won Indian Rupee Symbol Design Competition
- Stock Trading Software > Using Day Trading Software or a Stock Market System
- Choosing a Forex Broker That Wont Rip You Off
- Fisher Investments Releases Latest Stock Market Outlook
- U.s. Automaker Ceos: Congress Should Address Skewed Japanese Yen
- Peace Dollar
- Better Trades – a Better Teaching Strategy
Meta
Now You Can Also Earn Good Money from Forex Trading House
Register your free account and write post in web site and earn good amount on every each post.
No Copyright Allowed
Tags
