Monday, 10 Jan 2011

Dollar Tumbles as Risk-Appetite Increases

The U.S. dollar fell against most of the major currencies on Monday's trading session. The dollar dropped about 90 pips vs. the euro, and the EUR/USD is currently trading near the 1.2950 level. The dollar also saw a 120 pip fall against the British pound and a 60 pip slide vs. the Japanese yen.

The dollar fell for the first time in six days after stocks pared losses, damping demand for safe assets such as the dollar. In addition, a rise in commodities prices has also contributed to the greenback's bearishness. Crude oil climbed to $89.80 a barrel and gold reached as high as $1,376 an ounce.

Looking ahead to tomorrow, the most significant news event on the economic calendar looks to be the Canadian Housing Starts. This report measures the number of new residential buildings that began construction during the previous month. If the end result will beat expectations for 179,000 new buildings, the CAD might strengthen against its major currency rivals.