Tuesday, June 2, 2009

Dollar Stable Against Euro



After hitting this year’s low against multiple currencies, the dollar remained stable against the euro, showing a slight correction, yet, the sentiment remains bearish as risk appetite grows.

The greenback hit its lowest rate versus a basket of currencies this Monday, after a long rally fueled by economic signs of recovery in Asia and Europe, damping demand for the dollar’s safety investment profile. Today, the dollar is rather stable, with slight gains against the euro, yet it continues to lose ground against commodity-linked currencies like the Australian dollar and the Brazilian real. A strong rally in world equities markets is bringing back risk appetite among investors, leaving the dollar as an investment to look for higher-yielding positions in the stock markets.

Economists have rather divergent opinions, while some consider the euro to be overbought against the dollar, most of them agree that the global slump easing and the current optimistic scenario in the financial markets are likely to continue to weigh on the dollar. It is highly considerable that the greenback will continue to see losses against currencies like the Aussie and the South Korean won, but the main pairs traded will the dollar have a rather misty mid-term future.

EUR/USD traded at 1.4125 falling in the intraday comparison from 1.4135, AUD/USD remained virtually stable at 0.8077.

If you want to comment on the U.S. dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.


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