U.S. Dollar Appreciates against Major Currencies in Sydney
In mid-morning trading on Thursday in Sydney, the U.S. Dollar traded higher versus major currencies because of the belief that efforts by the Federal Reserve Bank to stimulate the economy is working. This optimistic view of the economy lifted the Treasury yields, even though the Consumer Price Index for April shows that core inflation still persists, which confirms speculation that the Federal Reserve Bank will not cut interest rates in the near future.
On May 15, 2008, at 10:10 am (00:10 GMT) in Sydney, the U.S. Dollar traded at 105.23 Yen compared to 105.05 Yen, while the Euro dropped to $1.5461 compared to $1.5471 in late trading in New York.
The Consumer Price Index data for April shows that the overall prices increased by 0.2% while core inflation, which excludes energy and food prices, rose by 1% in April.
Investors are of the opinion that the U.S economy is recovering and that the worst is behind, as a result of efforts by the Federal Reserve Bank.