US Dollar Drops on Profit-Taking
The US dollar extended its losses against most major currencies, including the euro, the Great Britain pound and the Swiss franc, for the third day as positive mood of Forex traders made them prefer currencies with higher yield.
The dollar dropped for the third session, but had a nice rally at the first half of the previous week and reached a multi-month record against some currencies. Some analysts claimed that it triggered profit-taking that still continues. That can explain the current losses.
Another reason that may explain the drop is the general sense of optimism on markets. The Standard & Poor’s 500 Index gained 0.4 percent and the Thomson Reuters/Jefferies CRB Index of commodities advanced 0.5 percent.
Traders should be cautious, though, not to become overly optimistic. Many economists point out that the optimism may be short-lived and demand for the US currency may return. Actually, concerns about the situation in Europe begin to reemerge and the dollar may soon make another jump to the upside.
EUR/USD traded at 1.3233 as of 00:30 GMT today after it rose from 1.3178 to 1.3237 yesterday. GBP/USD was at 1.5889, following yesterday’s advance from 1.5842 to 1.5886. USD/CHF dropped from 0.9154 to 0.9112 on the previous trading session and traded near 0.9115 today.
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Earlier News About the US Dollar:
- Absence of Quantitative Easing Results in Good Week for Dollar (2012-03-17)
- US Dollar Pulls Back in Forex Trading (2012-03-15)
- Dollar Jumps as Fed Refrains from QE (2012-03-14)
- US Dollar Mixed, But Mostly Higher (2012-03-12)
- US Dollar Rises as Quantitative Easing Becomes Less Likely (2012-03-09)