Forex Blog: Currency Trading News & Analysis.

August 8th 2005

What’s behind the Dollar’s recent decline?

In less than a month, the Euro has appreciated 4% against the Dollar, to the surprise and chagrin of traders who had been anticipating continued USD strength. Self-proclaimed experts have different theories on the recent weakness of the USD. Some cite technical reasons; each time the Euro dipped below $1.20, a de facto support level was created, as Euro bulls quickly rushed in to shore up the currency. Fundamental analysts argue the USD appreciated too fast and by too much; the current drop is merely a long overdue correction. Both USD bears and bulls, however, are equally surprised by the market’s sudden disinterest in economic indicators, which are overwhelmingly positive, and would seem to underscore support for the USD. The Wall Street Journal reports:

Since the dollar hit its most recent high versus the euro in early July, it’s seen a string of upbeat economic data, virtually no indication that U.S. rates are going to stop rising, and continued inflows of global investment dollars. The fundamental economic picture just keeps getting better.

Read More: Uncertainty in the Market Puts Falling Dollar at a Crossroads

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Posted by Adam Kritzer | in Investing & Trading, US Dollar | No Comments »

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© 2004 - 2018 Forex Blog.org. Currency charts © their sources. While we aim to analyze and try to forceast the forex markets, none of what we publish should be taken as personalized investment advice. Forex exchange rates depend on many factors like monetary policy, currency inflation, and geo-political risks that may not be forseen. Forex trading & investing involves a significant risk of loss.