Dollar Up on Banking Sector Problems

The dollar touched the highest level in a month versus the euro after speculations suggesting that banks throughout the world are still facing severe difficulties tor reestablish their financial situation fueled a rally for safety this Tuesday in trading markets.

After speculations suggested that the Federal Reserve is discussing future steps regarding interest rates in the United States which remain at a record low level, markets tumbled and demand for safety emerged in trading markets, forcing the euro and higher-yielding currencies down and favoring the yen, but specially the greenback, which fell significantly after being trade at over $1.50 versus the European common currency during October. Concerns regarding main financial institutions’ health also played a significant role today pushing traders towards safety, since a new series of bankruptcies would definitely change traders sentiment and markets would once again enter bearish trajectories, fact that would cause a considerable impact in higher-yielding options in currency markets.

The dollar is remaining the best option in turbulent times taking a place which has been occupied by the Japanese yen during the worst moments of the global slump, but it is also finding support considering that the economic situation in the United States is not significantly worse than other economic regions in the world, fact which contradicts the current devaluation for the U.S. currency.

EUR/USD traded at 1.4717 as of 22:34 GMT from a previous rate of 1.4795 in the intraday comparison. USD/JPY traded at 90.21 in a neutral position comparing with yesterday’s rate.

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