Wednesday, 26 May 2010

Dollar Gains after Good U.S. Economic News

The U.S currency extended gains on Wednesday versus the EUR and Yen aided by a jump in U.S. durable goods orders and new home sales. The Dollar was off more than 1% against the yen at 90.10. The U.S. data showing a rise in durable goods orders and new home sales at nearly two-year highs added to the market's view the U.S. economy will outperform Europe, putting a further pressure on the EUR. Investors dumped the EUR even as global stocks rallied after the stronger-than-expected U.S. economic data. In recent months, the Euro-Zone currency has become a proxy for risk appetite, rising or falling in tandem with stock performance. But that pattern changed on Wednesday. The market continues to have high sensitivity towards the Euro-Zone situation and the EUR is set to move lower against all crosses, analysts said.