Stock Gains help push U.S. Dollar to Highest Price in 3 Weeks
The U.S. Dollar saw some broad gains today, touching on its highest level in more than 3 weeks versus the Japanese yen, as the rising prices of shares helped to ease risk aversion, subsequently putting the Yen under pressure to sell. According to Steve Barrow of London’s Standard Bank, because stock prices are firming somewhat, there is some “bias towards risk taking.” As a result, the Japanese Yen is seeing the most trading activity.
A rise in European share prices by 1.4% strongly affected the Japanese Yen, which previously had benefited from the stock market declines over the past several months. This helped push the U.S. Dollar to its highest level versus a basket of major currencies as well as the Euro, over the past 2 weeks.
Versus the Japanese Yen, the U.S. Dollar rose .8%, trading at 92.97 Yen; this prompted U.S. Dollar buying across all markets and pushed the Dollar Index to 82.722 .DXY. Meanwhile, the Euro lost 1.5%, trading at $1.3662. According to analysts, the Euro is coming under pressure to sell since the announcement made yesterday by Lucas Papademos, ECB Vice President, that further interest rate reductions may be forthcoming in order to halt the Euro Zone’s march into a recession.