The U.S dollar rose Tuesday as a decline in stocks and dimming expectations about the U.S. economic recovery increased demand for U.S currency perceived as safer. Some investors buy the Dollar, seen as a safe haven, against other higher-yielding currencies and sell assets like stocks and commodities when economic optimism diminishes.
The greenback also climbed on speculation traders exited bets against the dollar before the U.S. Thanksgiving holiday. Analysts said that risk aversion is back in the markets supporting the greenback and putting pressure on high-yielding currencies like the EUR. In the current environment a weak U.S. Gross Domestic Product (GDP) number weighs on sentiment. Traders are a little more sensitive to sentiment changes because they want to get out of positions ahead of the long U.S. weekend.
The Commerce Department will release its second estimate of 3rd quarter GDP at 13:30 GMT today. The data may show the world’s largest economy expanded at a 2.8% annual rate, compared with the 3.5% estimated last month, according to economists. Traders will keep on eye on the advance estimates on corporate profits to be released together with the GDP report. The U.S. economic data have become more mixed and a further poor U.S. economic data and a general desire to reduce risk ahead of year-end are likely to interact to support the U.S dollar.
The Federal Reserve will also release minutes of its Nov. 3-4 meeting at 19:00 GMT, which will include economic projections for the next two years. Market players will particularly focus on the Fed’s forecasts for unemployment in the U.S.
source: forexyard.com
No comments:
Post a Comment