Monday, 11 Oct 2010

Dollar Corrects Losses vs. Majors

The U.S. dollar erased some of its losses against the major currencies on Monday. The dollar gained about 130 pips against the euro, and the EUR/USD has once again dropped below the 1.3900 level. The dollar saw mild bullish movements against the British pound and the Japanese yen as well today.

The greenback gained against most of the major currencies as investors bet that the dollar's recent declines reached too far, at least for the time being. The general sentiment towards the dollar remains bearish; however, as the Fed seems ready to inject cash into the economy after a weekend meeting of finance leaders, a mild correction appeared in place.

Looking ahead to tomorrow, traders are advised to follow the British Consumer Price Index (CPI), which is scheduled for 08:30 GMT. The CPI is considered to be the most reliable inflation gauge of the economy, and thus its result is usually followed with high volatility, especially with pound related pairs and crosses.