The currency markets saw plenty of action this week, with the US dollar volatile over speculation about who would take over as US treasury secretary, writes Tom Tragett, editor of ForexProfitAlert.co.uk. At the start of the week, the greenback fell nine-tenths of a cent against the euro on concerns that former commerce secretary, Donald Evans, would get the job.
Like all former businessmen who’ve held the post, he was expected to favour a weaker dollar in a bid to boost US exports. But the fall was reversed when Washington made it clear that the job is going to Goldman Sachs boss Henry Paulson, who is expected to defend the value of US assets with a strong-dollar policy.
Meanwhile, the dollar traded in a sideways range against the Japanese yen, albeit with a lean to the downside. Further evidence of Japan’s economic recovery has strengthened the possibility of a rate increase there.
By Tom Tragett, editor of ForexProfitAlert.co.uk. For more on the service, see below: