The U.S. Dollar slipped broadly today inching back toward a 5-month low versus the Pound Sterling, the single currency Euro and those currencies which are tied to commodities. Investors continue to regain an appetite for high-yielding assets and are foregoing the Dollar. Versus the Japanese Yen, the U.S. Dollar lost .2% to trade at 95.20 Yen, closing in on 93.85 Yen, May’s 2-month low. Versus the Euro, the U.S. Dollar dropped to $1.4170, a 5-month low on the EBS platform until it edged back up to $1.4125.
The U.S. Dollar is coming under increasing pressure on investor worries about the ever increasing U.S. debt burden and the growing budget deficit. Though there are signs that the U.S. economy is getting better, investors are still opting for higher yielding assets. According to a foreign exchange strategist in Tokyo, investor sentiment hasn’t changed – they’re still positive on risk and weak on the (U.S.) Dollar.
Fortunately, the news that General Motors intends to file for bankruptcy protection later today has not jarred the markets significantly, as the filing was generally expected. However, analysts do believe that the impact of the filing may be more noticeable on the currencies markets when the U.S. labor data is released.