Dollar Moves on Deteriorating Economy
Posted on 06. Mar, 2009 by admin in USD Analysis, USD Economic Analysis, USD News
The Dollar finished Thursday’s trading session lower versus most of its major currency pairs, as fears about the viability of General Motors, and the U.S. and European banks sent shock waves through the forex and U.S. stock market. Some better-than-expected economic figures coming out of the U.S. yesterday failed to make up for the losses the Dollar suffered from the tumble on Wall Street. This may be due to Unemployment Claims figures still being over the 600,000 level, indicating that the U.S. still has a long way to go before it recovers from the current economic crisis.
The Dollar finished down about 60 pips vs. the JPY yesterday, pushing the currency pair to the 98.23 level. The Pound also made some gains against the greenback to finish up 21 pips at 1.4176. The USD, however, rose 38 pips against the EUR to finish yesterday’s trading session at 1.2577. The 2 former results are notable, as the Interest Rates cuts in Britain and the economic troubles in Japan failed to push down the GBP and JPY vs. the Dollar yesterday. It is also likely that the Dollar’s bearishness against several of its major currency pairs yesterday was partly owed to investors realizing that the Dollar was slightly over-valued, leading to a reversal in some of the greenback’s recent gains.
Later today, there are several important economic data releases coming out of the U.S. These include the Non-Farm Employment Change, the Unemployment Rate, and the Average Hourly Earnings figures all at 13:30 GMT. All 3 of these are expected to be worse than the previous released figures. Therefore, if the actual results are the same as forecasts, then the Dollar may continue Thursday’s bearish trend. However, better-than-expected results may push the Dollar higher against its major currency rivals, going into the beginning of next week’s trading session.
