Wednesday, 20 Jan 2010

Dollar Reaches 5-Month High against the Euro

The Dollar continues to rise today against most of the major currencies. The EUR/USD dropped to the 1.4150 level, marking a 5-month low. The Dollar also appreciated against the Pound, and the GBP/USD is currently traded at the 1.6270 level.

The Dollar's bullish trend seems to come as a result of China's decision to limit bank lending. This has aroused concerns that global economic recovery will slow, and has increased demand for safe haven assets such as the Dollar.

Coming up later today, traders are advised to follow the U.S. Building Permits and Producer Price Indices. Both indicators are forecasted to produce similar results from last month. If the end results will be similar, it could strengthen the Dollar further.