Dollar Set to Gain Against Euro on Stronger US Growth

By TraderVox.com

Tradervox.com (Dublin) – John Taylor, the Founder and CEO of FX Concepts LLC currency hedge fund, has advised that investors should remain bullish on the US dollar as issues plaguing the US economy fade when compared with those in Australia and Europe. Talking about the current US dollar exchange rate, Taylor said that the dollar seems to be in a box between the important technical level of $1.29 against the euro and the downtrend levels of $1.3050 to $1.31. He noted that a close below $1.29 will be very bad technical signal, saying that a break out of this range will allow the dollar to make significant move.

The Dollar Index has dropped for the last two months and is set to decline in October. Efforts that are being taken in Europe to sustain the monetary union may yield fruits, as German Chancellor, Angela Merkel, have met with the Greek Prime Minister to discuss austerity measures and encourage the country to stay in the region. Taylor also said in an interview that staying bullish on the dollar is a good short-term and long-term play as the US economy is looking much better than other economies around the world. Citing slowing Chinese growth, Taylor said that Australia may have a hard time as the dollar appreciates and demand for raw material from Australia diminishes.

Taylor, whose company manages $3 billion of hedge fund, noted that the price of Australian commodities and exports is declining while the housing sector remains overpriced. The Australian dollar declined by 3.5 percent in the last quarter while the dollar declined by 0.9 percent. Yesterday, the dollar rose against the euro by 0.6 percent to trade at $1.2885 during the morning session in New York after it had strengthened to $1.2877. The US currency dropped against the yen by 0.1 percent to 78.23 yen as investors preferred the safety of the yen over that of dollar assets.

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