Dollar recession against the other major currencies

dollar
Dollar recession

Today, the dollar fell down in comparison with the most major currencies, so traders sold the currency for profits as a risk-off rally. Weak U.S. profits and European uncertainty sent the greenback gaining earlier.

During the current Asian trading, the pair EURUSD raised to the level of 1.2988.

Investors rushed to the safety of the dollar after Moody’s slapped credit-rating downgrades on the Spanish regions of Andalucia, Extremadura, Castilla-La Mancha, Catalonia and Murcia.

The news hit the euro and made it unstable, so the question is when Spain will request a security plan, although the currency got back its composure in Asian trading that on its turn sent the dollar falling.

Demanding financial assistance would allow Spain to tap the European Central Bank’s bond-buying program, which could lower yields in Spanish government debt auctions and ease the Spanish credit conditions. Besides, the Bank of Spain claimed that the country’s GDP contracted by 0.4% in the third quarter, leaving the country in a state of recession.The Spanish monetary authority also emphasized that it could not rule out missing deficit targets later this year.

In between, the U.S. dollar forced investors to chase the safe-haven greenback before profit-taking kicked in.

U.S. chemical maker DuPont showed earlier that third-quarter profits excluding items came to USD0.44 per share, down 37% from USD0.69 per share during the same period during the previous year.

Revenue dropped to USD7.34 billion from USD8.14 billion, while the company also announced it was cutting 1,500 positions.

The U.S. dollar was flat against the yen, with USDJPY at 79.86 and fell down against the Swiss franc, with USDCHF at 0.9319. The American currency was also lower against its fellows in Canada, Australia and New Zealand, with USDCAD at 0.9914, AUDUSD at 1.0314 and NZDUSD at 0.8137.

Trading markets are expecting that the Eurozone will release preliminary data on manufacturing and service sector activity later today.

In America, official data will expose new home sales that are considered to be leading indicator for stable economy, as well as government data on crude oil inventories.

Today, the Federal Reserve is expected to announce its benchmark interest rate and to release its closely watched monetary policy statement.

 

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