Doller Tumbled
Posted by avafx on May 29, 2009
EUR/USD rallied for second day in a row reaching the highest level of the year at 1.4168. The last time the pair closed above 1.4100 was on December 19 of last year. On Friday the pair raised more than 250 pips.
The dollar tumbled sharply against the Aussie, falling past the 0.80-handle for the first time since October. Us economy is still showing a downside risk.
The Fed said further increase in securities purchases may help spur the recovery. The Fed holds the decision on more securities purchases to analyze the economical and financial condition.
The dollar took fright overnight after a warning from an Asian agency harmed the prospects for plans to raise the issuance of U.S. government debt.
The drop in the value of the dollar has partially inspired investors to favor physical commodities, a traditional hedge against a weaker dollar. Accordingly, the Greenback suffers every time with good economic data and/or a stimulated stock market as more investors accept greater risk.
