Tuesday, 28 Dec 2010

Dollar Moves Higher against EUR on Negative Economic Data

The dollar hit a record low against the Swiss franc and tumbled against the yen on Tuesday after Japan reported its factory output rose in November for the first time in six months. The Dollar is currently trading lower against the CHF by nearly 50 pips at 0.9510. It is also trading lower against AUD and CAD, as traders feel that the U.S. currency is an unstable bet for today.

A surprise decline in U.S. consumer confidence this month, however, helped the greenback recover losses against the euro, which had climbed as high as $1.3274 overnight before falling back to $1.3130, down 0.2 %.

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, a fear about the Dollar's instability has led gold to rise over $15. 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.