US Dollar Gains Amidst Rate Cuts from Central Banks
US dollar is gaining as central banks around the world make moves to stimulate their economies. Greenback is headed higher on rate cuts in Europe and China, and an increase to Britain’s asset purchase program.
With central banks around the world cutting rates in an effort to stimulate their economies, it is little surprise that the US dollar is on the rise. Uncertainty is contributing to the desire for safe haven, and that means the greenback is in demande.
The European Central Bank cut its rate to 0.75 percent today, a new record low. Throughout the global financial crisis and recent recession, the ECB avoided going below 1.0 percent, but now that has changed. In another surprise move, the People’s Bank of China also cut its interest rate. The Bank of England didn’t reduce its benchmark rate, but it did expand its asset purchase program by 50 billion pounds.
Meanwhile, in the United States, the latest ADP data indicates that the private sector added 176,000 jobs in June. This news further bolsters the idea that the US economy is in something of recovery mode, while other economies struggle with slow downs.
At 13:32 GMT the US dollar index is up to 82.822 from the open at 82.205. EUR/USD is down to 1.2370 from the open at 1.2528. GBP/USD is down to 1.5515 from the open at 1.5589. USD/JPY is up to 80.0795 from the open at 79.8900.
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Earlier News About the US Dollar:
- US Dollar Softens as Factory Orders Rise (2012-07-03)
- US Dollar Rises as Uncertainty Shows Through (2012-07-02)
- US Dollar Pulls Back on Better News Out of Europe (2012-06-29)
- US Dollar Higher as Uncertainty Abounds (2012-06-28)
- US Dollar Weak as Bad Data Means Higher Probability of QE3 (2012-06-26)