U.S. Dollar loses Ground against Major Currencies in Thin Holiday Trading
In very light London trading, the U.S. Dollar lost value against the Euro as well as a basket of major currencies today. Traders are actively reducing their long positions in the greenback before the end of the year, in what are the last two remaining trading days of 2008. According to a UBS currency strategist, investors don’t want to be exposed and in the wrong position as they head into a new fiscal year, so they’re actively clearing out their current positions.
Furthermore, many investors are suggesting that the continuing attacks in the Gaza Strip by Israeli forces is dampening U.S. Dollar sentiment, while simultaneously propping up the Swiss Franc, which is at its highest price in nearly 5 months.
The Pound Sterling took a hit against the U.S. Dollar, though, touching on its lowest price in more than 6 years and nearing parity with the Euro, as investors are taking the view that the economic conditions in the United Kingdom will likely continue to deteriorate. The Euro gained 1.3%, trading at $1.4160 in early trading today, recovering slightly from a slide precipitated by the U.S. Dollar’s inability to maintain earlier gains.