Recession Concerns Sets Dollar to Weekly Gain
The dollar is coming to this week’s end advancing against the euro and the pound, after a U.S. report indicated more job cuts than predicted, raising concerns that the global slump may be prolonged for an undetermined amount of time.
The Dollar Index climbed for a second day in a row, being the U.S. jobs report the main reason to provide support for a certain level of pessimism to permeate the markets, since further jobs cuts can be understood as a signal of rougher times ahead the American economy, and consequently, worldwide. The dollar advanced not only against the euro, but also posted the firstly weekly gain versus the pound, as today, a report in London is likely to show an industrial production contraction for the month of June. As long as global slump concerns fail to disappear, the yen and the dollar will have positive days, as traders considers these currencies the best refuges for stormy times, as the recession continues, the dollar and the yen will remain bullish.
Analysts stress on the impact that yesterday’s employment report had on markets, pushing equities markets immediately down, and increasing risk aversion among traders hastily. Currency specialists perceive a influx of capital coming from stocks to currency havens, being the dollar and the yen, the most attractive ones for a downtrend scenario.
EUR/USD fell to 1.3988 as of 11:19 GMT from 1.4020 in the intraday. GBP/USD traded 1.6330 from 1.6365.
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Earlier News About the US Dollar:
- China's Confidence on Dollar Pushes Greenback Up (2009-07-02)
- Dollar Climbs as China Confirms Its Global Reserve Currency Status (2009-06-29)
- Dollar Declines on China Alternative Reseve Currency Demand (2009-06-27)
- Dollar Drops on Interest Rate Outlook (2009-06-26)
- Dollar Down on Durable Goods Data Speculation (2009-06-24)