Friday, August 27, 2010

US Dollar Dropped Due to Increased Risk

The US dollar slides against most of its major counterparts, as gains in stocks and commodities prompted investors out of riskier currency trades. The USD stumbled down against the Swiss Frank, pushing the exchange rate to 1.024. The dollar dropped against EUR and closed at 1.272.

A fall in new US home sales and fragile orders for durable goods has again unearthed prevailing weakness in the US economy. As per analysts such data has failed to fuel demand for the dollar. US dollar is losing its value as safe heaven investment.

US unemployment claims although improved as compared to last week could not make much difference as the investors are still waiting for more important data to be released today that is Prelim GDP .

Traders are closely monitoring the announcement as a stronger than expected result may boost the USD in the short-term. Traders are also advised to follow Fed Chairman Bernanke's speech at 14:00 GMT. This speech is very likely to impact dollar volatility. Traders are advised to watch closely, as this is likely to set the pace of the dollar going into next week's trading.

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