The Dollar Drops
Forex Traders and Trading Partners of the USA are losing their confidence in the US Dollar. This was expressed in the Forex Market last week. The bearish trend of the US Dollar was intact. The US Dollar continued to be traded at its lowest with the majors and in some cases it was at its lowest since October, 2008. The US Dollar continued its decline against all the major currencies.
- The US Dollar slipped to 1.5900 against the Pound, touching its October level.
- The Dollar reached $1.4030 against the Euro, the weakest level since January the 2nd..
- The Japanese Yen touched 93.86, the strongest level since March 19th..
- The Canadian dollar advanced to C$1.1205, the strongest level since October the 9th..
- The New Zealand’s Dollar climbed to 62.38 U.S. cents, the highest since October 21st..
- The Australian Dollar reached 78.67 U.S. cents, the highest since October the 2nd..
The fall is said to have started on March 18, when the Fed announced plans to buy up to $300 billion in U.S. government debt to keep interest rates low and stimulate the economy.
There was no change in the bearish trend of the US Dollar and technical analysts are expecting the decline of the US Dollar to continue in the short term.
Low Confidence in the US Dollar
There are several statements and expressions reflecting the loss of confidence in the US Dollar.
Brazil and China are negotiating to use their own currencies in their trading. This should be seriously taken as an expression of no confidence in the US Dollar and the US monetary policy.
Other statements on the ebbing confidence of the Dollar are as follows:
The U.S. will “eventually” lose its AAA credit rating.
Bill Gross of Pacific Investment Management Co. Reported by Bloomberg.
The credit-rating story is bubbling to the surface.
said Alan Ruskin, head of international currency strategy in North America at RBS Securities Inc. in Greenwich, Connecticut. Reported by Bloomberg.
Apparently, there is a growing concern on deterioration of the U.S. creditworthiness and near-zero borrowing costs. The increase of purchase of assets by Fed caused the financial markets to deteriorate further.
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