Hurricane Rita downgraded
The USD has moved in tandem with oil prices over the last few weeks, which have largely been shaped by the impact of hurricanes. A popular joke holds that currency traders spend more time watching the weather channel these days than CNBC. Suffice it to say that when Hurricane Katrina was downgraded to a Category 3 hurricane, currency traders instantly turned bullish on the USD, on the basis that oil producing facilities would likely sustain minimal damage as a result of the hurricane. At this point, unless Hurricane Rita changes course and/or intensifies (both of which are unlikely), you can expect support for the USD to continue into next week. Reuters news reports:
The hurricane was expected to make landfall late on Friday or early Saturday and had veered away from Houston, Texas -- a major metropolitan center and the heart of the U.S. oil refining industry.
