Friday, 20 Nov 2009

The Dollar is Up, But For How Long?

Trading on Friday saw the U.S. Dollar and Yen hanging on to their impressive gains made the previous day, even as the sell off of risk currencies seemed to slow down. Both the Aussie and Kiwi were down overall for the week and the Euro dropped slightly in recent trading. A slow trading day on Wall Street helped elevate the dollar, but the greenback was still down against the yen. While it may seem at the moment that investors are avoiding riskier currencies, there is no evidence to support that this trend will continue into next week. Traders should pay attention to any gains made in the U.S. stock market, which would most likely halt the dollar's recent gains. Crude oil fell for a second straight day on Friday as prices for December deliveries were down 0.7%. With reportedly ample fuel supplies in the United States ahead of the holiday season, analysts are conflicted as to whether the current down trend will continue into next week. If the current trend in the stock market continues to drive the dollar up, expect oil prices to continue to fall. If the euro makes gains in upcoming trading, the price of crude will most likely rebound.