Wednesday, 15 Jul 2009

USD Declines on Mixed U.S. Data

The USD witnessed a steady depreciation against most of its major currency counterparts during today trading session. The Dollar is currently trading lower against the GBP by nearly 100 pips at 1.6420. It is also trading lower against the EUR and CHF, as investors remain wary of making big bets in favor of the Dollar these days.

U.S. data released on Wednesday offered fresh hope the global recession had eased as Asia's top two central banks flagged the need to rein in emergency stimulus. U.S. industrial output declined at a slower pace in June and the Empire State Manufacturing Index posted its strongest reading since April 2008, positive signs for markets tugged by mixed data from both sides of the Atlantic this week.

As the U.S. market comes to a close, the USD may continue to weaken further, as forex traders feel that the USD is a risky bet for today. As a result, fears about the Dollar's instability have led Oil to rise over $1.50. If today's trend continues, then the USD may be in for a bumpy week as a sell-off of the Dollar may hit full-force.