U.S. Dollar Continues to be Under Pressure
Investors are still skeptical about the recovery of the U.S. economy and as a result, the U.S. Dollar traded slightly weaker against major currencies on Tuesday in Singapore. High oil prices elevated commodity currencies including the Canadian dollar. Despite better than expected results of the ISM Survey, covering U.S. services which jumped from 49.6 in March to 52.0 in April, the U.S. Dollar dipped.
The Euro rose slightly by 0.2% against the U.S. Dollar, following the report on Monday that investors’ morale in the Euro zone is low, despite a warning from the president of the European Central Bank, Jean-Claude Trichet about inflation risk. The first quarter loss and job cut announced by the Swiss Bank UBS affected the value of the Euro.
Financial markets in Tokyo closed for the second day because of a public holiday. The U.S. Dollar traded around 104.8 Yen, compared to 105.62 Yen high yesterday. Most analysts believe that the U.S. currency is under renewed pressure because investors risk appetite seems to be levelling off. According to Callum Henderson of Standard Bank, there is a lot of cash floating around, and investors are beginning to reinvest and “refocusing on nominal interest rate spread.”