Wednesday, 8 Jul 2009

Dollar Plummets to 6-Week Low Versus the Yen

The Dollar plummeted to a 6-week low versus the Yen earlier today to the 94.08 level. However, the greenback continues to hold strength vs. the GBP and EUR. Much of this behavior is owed to deepening banking woes, and mounting debt problems for both Britain and the Euro-Zone. These problems may continue Dollar and Yen bullishness throughout the day.

There is a possibility that the U.S. Dollar could experience a surprise drop today, as G8 finance ministers discuss possibly replacing the USD as the global reserve currency at the G8 Meeting in Italy. This may be yet another reason for the USD's bearishness against the Yen. It would be advisable for traders to follow this event closely today, as market volatility may occur from surprise statements from G8 finance ministers.

As the U.S. market opens expect much volatility, as traders react to the far better than forecast German Industrial Production data, which was published earlier today. This may provide a drop in the EUR/USD cross as the day drags on. In turn, Crude Oil could see an upward trend today, as it is priced in Dollars. This could be more so if we see Crude Oil Inventories decline from last week's levels,when the results are published at 14:30 GMT.