Wednesday, 25 Nov 2009

Dollar Hits New Lows Following FOMC Minutes

Following yesterdays release of minutes from a U.S. Federal Reserve meeting, the USD hit a ten month low against the Yen reaching Y87.57 in morning trading. The Fed acknowledged the dollar's poor standing, thereby giving off the impression that record low U.S. interest rates will stay low for the foreseeable future. Consequently, the Euro shot up 0.5% reaching as high as $1.5085 and the AUD gained 1.0% to reach $0.9284. The most recent American unemployment claims show a better then expected economic situation. This will likely lead to more risk taking among investors, driving the dollar down further.

In commodities trading, gold again hit record highs pushing above $1180.00 an ounce amid news that India is ready to buy more bullion. Additionally, the same news that is currently driving the dollar downward is also elevating gold as investors try to divest from the greenback. This trend will likely continue, as the dollar shows no sign of moving up anytime soon.