US Dollar Rises as Quantitative Easing Becomes Less Likely

  March 09th, 2012 at 14:23, Miranda Marquit

US dollar banknotes and coinsUS dollar is rising today, gaining as improved economic data provides support. With the latest non-farm payrolls report, it appears that the economy is recovering sufficiently that the Federal Reserve is unlikely to institute another round of quantitative easing to stimulate the economy. The news is giving the US dollar the upper hand right now.

For February, non-farm payrolls increased by 227,000. This followed an increase in January, and was marked by holding at an unemployment rate of 8.3 percent. The news is encouraging many, who believe that this is a sign that the US economy is ready to turn around. As a result, it is less likely that quantitative easing will be needed to help stimulate the economy going forward.

Ben Bernanke indicated earlier that there wouldn’t be a need for more stimulus if signs of economic recovery continued to show. The idea that there won’t be a huge amount of dollars pumped into the economy is supporting the US dollar against other majors.

Indeed, the US dollar is gaining against European currencies. When contrasted with the situation in Europe, the possibility of US economic recovery is rather encouraging, providing the greenback with the upper hand — at least for now.

At 14:20 GMT EUR/USD is down to 1.3134 from the open at 1.3274. USD/GBP is lower at 1.5727, down from the open at 1.5831. USD/JPY is higher at 82.2715, up from the open at 81.5535.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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