The US dollar declined versus its major rival in overnight trading session on Friday despite the improved economic data for United States.
The dollar index DXY which measures the greenback’s performance versus its major counterparts dropped to 79.78 in overnight trading session as compared to 80.167 on late Thursday North American trading session.
Most of the economists believe that the US dollar witnessed the correction after a buying spree of last one week however analysts are still optimistic about the US dollar and US economy. Moreover US gross domestic product of 4% is expected for the current quarter.
Strategist at Royal Bank of Scotland commented, “Fiscal policy and stronger economic momentum have been the U.S. dollar drivers over the last 6 weeks, the U.S. dollar has responded to rising U.S. rates, and we expect stronger U.S. momentum and higher rates to support a more rapid U.S. dollar gain during the first half of 2011.
The Euro gained to 1.3290 against the US dollar as compared to $1.3217 as on late Thursday. The investors gained confidence in Euro as the European leaders decided to find a permanent solution for European countries with sovereign debt crisis. The European council will announce is framework on how to bail out the European countries with debt crisis on Friday.
The US dollar also declined to 83.85 against the US dollar as compared to 84.17 on Thursday. Currency Strategist at BNP Paribas said, “as well as being supported by changing liquidity dynamics, we expect the U.S. dollar to be increasingly supported by signs of the U.S. recovery gaining momentum over the coming year, the best way to position for further positive surprises coming from the US economy is via long U.S. dollar/Japanese yen strategies in our view.”
Daily forex trading news written by Rehan from DailyForexTrade.com
