Friday, 22 Jan 2010

USD Drops Following Announcement of New Bank Rules

The U.S. Dollar fell broadly in trading today following the announcement that President Obama plans on implementing tough new rules for American banks. Investors scrambled to understand how the new plan would affect profits on Wall Street, leading to a drop in the stock market. The Euro rose 0.3% on the Dollar and was trading at 1.4138 before dropping to its current level of 1.4120. USD/JPY dropped some 50 pips following the announcement, before rebounding slightly to its current level of 90.30.

Looking ahead to the afternoon, traders will want to pay attention to the U.S. Consumer Confidence report set to be release at 15:00 GMT. The report is a leading indicator of how the American economy is performing, and is likely to create volatility in the marketplace. If the report comes in above the forecasted figure of 53.7, traders can expect USD to recoup some of its losses. If consumer confidence comes in below expectation, the Dollar's downward slide will likely continue.