The U.S. dollar traded today in the lowest level versus the European common currency as solid evidences of economic recovery continued to appear in North America and worldwide, spurring demand for yielding and weighing on the greenback outlook.
Oddly enough, another report to be published today with expected positive figures is already influencing the U.S. currency negatively, as evidences of economic recovery are being interpreted by traders as an increase in confidence to purchase riskier assets, leaving the relative safety profile of the greenback less attractive, as investors opt for commodity linked currencies like the Canadian dollar, and assets in emergent markets like South Korea and Brazil. Today, as stocks rose globally, both the Australian and the New Zealand dollar managed to hit this year’s high versus the greenback, due to their highly stock-related profiles.
It is hard to determine which direction the dollar will take from this moment, since clearly, optimism as the global economy recovers will affect the forecasts for the greenback. Analysts suggest that it is possible, yet unlikely, that the euro will be traded at 1.60 per dollar as it happened last year before the credit crunch, but the economic scenario is extremely differently currently, making it harder for the euro to gain strongly and quickly as it did one year ago.
EUR/USD traded at 1.4675 as of 10:46 GMT from a previous rate of 1.4605 yesterday. AUD/USD traded at 0.8714 from 0.8581.
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