• Dollar Tumbles Before Economic Summit
  • Dollar Tumbles Before Economic Summit

    David Sumner | 07:55 | 24/08/11
    The U.S. Dollar weakened against the majority of its peers on speculation that Federal Reserve Chairman, Ben Bernanke, may announce further steps needed to help boost the ...

The U.S. Dollar weakened against the majority of its peers on speculation that Federal Reserve Chairman, Ben Bernanke, may announce further steps needed to help boost the economy. Investors predict that these steps may include the purchase of additional debt. This increased demand for risk assets. On the economic front, the Dollar dropped following lackluster data showing a big decline in new Home Sales for July. Other metrics indicated that the Richmond Fed Manufacturing Index dipped more than expected. Economists say that if further stimulus is introduced, short-term inflation may rise and the Dollar may weaken further.

World currency trading experts think that the entire market is waiting for the summit at Jackson Hole, Wyoming.

Market analysts believe that the buoyancy of the currencies was brought on by better than anticipated figures for Manufacturing Activity in China and the Euro region. The Euro rallied the most in one week versus the U.S. monetary unit as stocks traded high. However, the Euro erased some of its gains as economic calendar releases showed that German investor confidence dropped in August.

The New Zealand and Australian currencies strengthened against the greenback following news that manufacturing in China rose.

And given a return of risk appetite to the markets, the Swiss Franc depreciated against the U.S. Dollar while the Yen dipped versus the Euro. The Pound Sterling also benefitted from the shift in investor sentiment as well as from the better than anticipated Euro-region PMI.

 

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