Tuesday, 5 Jan 2010

Dollar Slides as Commodities Soar

The US Dollar steadied on Tuesday, keeping broad losses made from the previous day, as growing hopes for a global economic recovery encouraged investors to shift funds to riskier assets and away from the greenback.

Gold rose as high as $1,127 on Tuesday as the dollar fell against the EUR, and as crude oil maintained its strength, although some resistance emerged and pushed Gold back towards $1,121. Further gains could be on hold for the rest of the day, however, as investors await news that will provide clues to the state of the global economy.

The release of the U.S Pending Home Sales and Factory Orders at 15:00 GMT is likely to set the tone for the Dollar's direction in today's trading. Better-than-expected results may help the Dollar recover some of early trading losses against its counterparts, such as the EUR. On the other hand, if the results turn out to be in line with forecasts, the Dollar may record a fairly bearish session in today's trading.