Monday, 28 Feb 2011

Dollar Slips to Almost Four-Month Low vs. Euro on Speculation ECB Will Hike Rates

The U.S. dollar fell against most of its major currency counterparts on Monday's trading session. The dollar saw a 130 pip drop against the euro, and the EUR/USD pair reached as high as the 1.3850 level, near a four-month high. The dollar also fell about 150 pips against the British pound, and the GBP/USD pair peaked at the 1.6275 level.

The dollar fell against the euro on speculation European Central Bank (ECB) President, Jean-Claude Trichet, may decide this week to hike interest rates from a record low of 1.00%. Nevertheless, by evening trading the dollar managed to correct some of its losses as it seems that investors didn't want to risk too much on that bet.

Looking ahead to tomorrow, many interesting economic releases are expected from around the globe. Traders are advised to pay special attention to the Canadian Overnight Rate, which is scheduled at 14:00 GMT, as any decision to manipulate interest rates is likely to have a large impact on the market.