Monday, 18 Jan 2010

Dollar Drops as Risk Appetite Grows

The Dollar dropped today against most of the major currencies. The Dollar was trading near a one-week high vs. the Euro, yet as the day progressed the Dollar tumbled against the Euro, the Yen and the Pound.

U.S. banks were closed today in observance of Martin Luther King day, and this low volatility caused a rather stabile trading day. Nevertheless, the main reason for the Dollar's drop today looks to be increased risk-appetite, which drove investors to look for higher-yielding assets. The strengthening of crude oil contributed to the weak Dollar as well. Crude oil rose today from $77.50 a barrel, and is currently traded near the $80.60 level.

Looking ahead to tomorrow, a batch of data is expected from the U.S. economy and the Euro-Zone. Traders are advised to follow the German ZEW Economic Sentiment and the U.S. Lon-Term Purchases publications, as they are likely to have a great impact on the market.