Forex News

After gaining more than 5 percent this month versus the euro the greenback declined as investors speculate that current gains for the U.S. currency may have been excessive, forcing the dollar down versus higher-yielding currencies as well.

The dollar declined versus the euro and higher-yielding currencies as stocks rallied worldwide on evidences that the economic recovery is improving around the world, fueling risk appetite among traders that opted today specially by currencies like the South African rand, a high-yielding emerging market bet.

The U.S. dollar started this week trading near a three-month high versus the European common currency as optimism regarding the improving economic conditions in North America maintained the greenback at high levels versus most of the 6 main traded currencies.

The Australian dollar posted a significant decline this week and may extended its losses versus currencies like the U.S. and the Canadian dollar after policy makers affirmed that interest rates may not be hiked further in the short term, decreasing attractiveness for the Aussie dollar in currency markets.

The Australian dollar has been one of the best performers in currency markets during the past few months as it was the first country to raise interest rates among the wealthy nations, today the sentiment towards the Aussie changed after surprising statements from the country’s financial authorities.

The U.S. dollar reached the highest rate in more than 2 months as a speculations regarding a series of reports to be released today indicate that favorable numbers will help the Federal Reserve to lift stimulus measures raising attractiveness for assets in the world’s wealthiest nation.

After trading near $0.90 in the end of the last week as the U.S. dollar rose against its Australian counterpart, the Aussie, pushed by renewed risk appetite, managed to climb significantly not only versus the greenback but also lower-yielding currencies.

The U.S. currency rebounded sharply yesterday before the end of this week’s session as a better than expected jobs report started speculations that interest rates in the U.S. will be hiked by the Federal Reserve before most analysts previously estimated.

After declining considerably yesterday versus the greenback, the Aussie dollar recovered today and is heading towards another weekly gain versus its U.S. counterpart as a report is likely to post favorable employment figures in the world’s largest energy consumer, raising demand for commodity linked currencies.

The Australian dollar rose versus most of the 16 main traded currencies as interest rates were once again raised in the country, making the Aussie currency one of the most attractive investment in foreign-exchange markets this year.