By: Barbara Zigah
The U.S. Dollar slipped broadly in early London trading today, as investors’ appetite for higher risk/higher yielding currencies increased. Recent comments from a Federal Reserve Bank official reinforced the market view that the current historically low interest rates in the United States will continue until the economy sees a stronger recovery. Elizabeth Duke, a board member of the Federal Reserve, noted that it will be an extended period of time before interest rates will rise. As reported at 9:31 a.m. (GMT) in London, the U.S. Dollar Index lost .2% in early morning trading.
The single currency Euro traded at $1.4425, up .1%, a slight retreat from $1.4480, a 3-week peak established earlier; yesterday, the Euro rose .6% against the U.S. Dollar. The Japanese yen slipped versus the greenback, however, trading at 91.90 Yen, a decline of .7%.
Yesterday, a report on U.S. factory output and production showed encouraging signs of improvement. For the 5th straight month, the ISM Index gained, rising from 53.6% in November to 55.9% in December, and the highest rate in the sector since April 2006. Despite the positive news, the majority of investors continue to believe that the U.S. Dollar remains weak.
U.S. Dollar Slips in London Trading on Increased Risk Appetite
Barbara Zigah