Thursday, 9 Jul 2009

Dollar Slides against the Majors

The dollar's instability continued today, as the greenback dropped against all the major currencies. The dollar dropped around 200 pips against the EUR, and around 300 pips against the Pound.

The dollar's drop against the GBP came as a result of the Bank of England (BoE) announcement today, deciding to keep Interest Rates at their current level. The BoE surprised markets today by leaving interest rates unchanged at a record low of 0.5% for a fourth month running. In addition, during the G8 meeting today, the leaders of the world's biggest developed and emerging nations avoided the debate over the dollar's role in the global economy. However, speculations that the leading economies will consider devaluating their currencies to promote their exports have also contributed to the sliding dollar.

As for tomorrow, traders should look forward to the Trade Balance report from the U.S, scheduled for 12:30 GMT. Current predictions suggest that a poor -30.0B result might take place. Such a result might extend the dollar's bearishness against the majors.