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U.S. Dollar retreats against the Euro following Obama Speech
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Thursday, January 28, 2010 GMT
By: Barbara Zigah
The U.S. Dollar stepped back off a 6-month peak versus the single currency Euro following U.S. President Barack Obama’s State of the Union Address last night in Washington. Mr. Obama offered his proposal to revive the U.S. economy, with little mention of stronger bank regulations which effectively eased market concerns. Prior to the speech, the U.S. Dollar Index had surged to a new 5-month peak, helped by speculation that key U.S. interest rates would increase. As reported at 1:47 p.m. (JST) in Tokyo, the U.S. Dollar traded against the Euro at $1.4020; earlier in the day’s trading on the EBS platform, it had struck $1.3930, the highest trade since July 2009. The U.S. Dollar Index, which gauges the greenback’s strength versus a basket of major currencies, reached 79.066 .DXY, the highest price since August 2009.
The focus of Mr. Obama’s speech was clearly on job creation in the U.S., and his pledge to increase exports by 100% over the next five years prompted some investors to believe that the U.S. administration may push for a weaker dollar in an effort to reach that goal.
Also in the U.S., the Federal Open Market Committee concluded its 2-day policy meeting, and the statement issued was more dovish in tone than previous statements had been, helping to boost the U.S. Dollar. According to the statement, while key interest rates would remain near historic levels, emergency bank lending operations would cease at the end of this month.
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