US Dollar rebounds ahead of U.S. economic news

On March 5, 2008, the U.S. Dollar rebounded slightly against major currencies as foreign exchange managers squared up positions in advance of the release of various U.S. economic data.  Yesterday, the Euro was trading as high as 1.5250 USD, but this was short lived, because investors do not have a complete picture of the health of the U.S. economy and as such, cannot anticipate whether or not the fed will cut interest rates at its next meeting on March 18th.  Both the anticipated data and the available corporate information would certainly determine the extent of the fed’s rate cut.

Some analysts believe that if the financial crisis, which started last year, appears to have impacted some key elements of corporate activity then the U.S. Dollar may soon come under pressure.

On Thursday, March 6, 2008, the European Central Bank will again meet to decide on the direction of interest rate.  At the ECB’s press conference, some analysts will be looking for any indication that the ECB will intervene in the market to slow down the rise of the Euro, which has affected exports from the Euro zone

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