Thursday, 21 Jan 2010

Chinese GDP Results Lead to Dollar Gains

The U.S. Dollar received a considerable boost in trading today, as persistent concerns regarding Greece's debt management as well as China's economic growth brought investors to the greenback. The European Commission remains adamant that no additional financial assistance will be provided to Greece. At the same time, Portugal has been warned regarding its ballooning budget deficit. EUR/USD has continued its downward trajectory and is currently trading around the 1.4075 level.

China reported a higher then expected growth rate in the fourth quarter of 2009. This raised the prospect of higher inflation rates in China, causing investors to turn to the safe haven status of the U.S. Dollar. Forex traders will want to pay careful attention to the markets reaction to this weeks U.S. unemployment claims. Unemployment figures came in slightly higher then expected. This could possibly temper Dollar gains in evening trading.