Dollar to Gain on Grim Global Outlook

The U.S. dollar profited last week from a wave of uncertainty that brought investors to opt for safer bets in foreign-exchange markets, and this trend might last for a longer period mainly versus European currencies as the economic outlook in the region is far from optimistic.

The dollar started February touching new record highs in 2010 versus the euro and gaining sharply versus the pound, as the U.S. economic is providing better figures than other economic regions around the world, and traders might witness a longer rally for the U.S. dollar as China new bank loans restrictions is likely to show reports impacted by the these measures in the following months. The euro is one of the currencies which is losing the most versus the greenback as its already well known budget deficit issue among some Eurozone member countries is making investors to avoid the region for the moment, making the dollar to touch the highest level in 6 months versus the European single currency.

Reports in the U.S. have been considerably better than in countries like the U.K., Australia and emerging markets, and this, combined with lack of confidence regarding the global economic recovery so expected in 2009 for the current year is making the dollar to rank among the best bets in forex markets this month.

EUR/USD is at 1.3639 as of 04:39 GMT from an opening rate of 1.3655. GBP/USD traded at 1.5602 from 1.5590.

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