Thursday, 18 Feb 2010

Dollar Higher on Continued Euro-Zone Debt Concerns

The U.S. Dollar is trading near a 9 month high versus the EUR in European trading today amid rising concerns over Italy's debt. The Dollar received a further boost after the International Monetary Fund's (IMF) recent announcement it plans to sell more than 190 tons of gold on the open market. The British pound was down 0.5% versus the U.S. Dollar as it came under pressure after the Office for National Statistics showed the U.K. public sector was a net borrower in January, defying expectations for a net repayment.

The EUR is down at $1.3585 from $1.3607 and at ¥123.33 from ¥124.10. The Pound fell to $1.5613 from $1.5680 late Wednesday in New York. The Dollar is also down at ¥90.77 from ¥91.20

The Dollar is benefiting both from its role as a safe haven and from economic data this week that have consistently been better than the market anticipated. With numerous data releases expected today, a continuation of this trend will likely provide further support for the Dollar.