Tuesday, 11 Aug 2009

USD Falls as Trading Day Takes its Toll

The USD fell today as the trading day took its toll. In earlier trading the Dollar seemed to hold strength as the U.S. economy released figures showing that worker productivity increased at the fastest pace in 6 years. However, the greenback was not able to hold onto these gains, and its downfall coincided with that of the equity market. As a result, the Japanese Yen regained its position as the number 1 safe-haven currency.

The Dollar is now trading lower against most of its major currency pairs in late trading. The EUR/USD pair is trading higher by 20 pips at 1.4160. The USD is trading 60 pips lower against the Swiss Franc at the 1.0807 level. The USD/JPY pair is now on a 3-day losing streak at the 96.00 level. This behavior comes about as global equities and commodities such as Crude Oil have tumbled, and investors seek a safe-haven in Tuesday's trading.

Looking ahead to late night trading, the USD's bearishness is set to continue, as traders continue to sell-off the greenback, due to realizing that it has been overvalued in recent trading days. Even with regards to the JPY and GBP, the U.S. Dollar may show more signs of weakness, as the British and Japanese currencies were oversold against the Dollar in the past week. Therefore, traders are advised to open their USD positions now, as late night trading kicks in.