By: Barbara Zigah
Investors cutting their short U.S. Dollar positions helped to give the greenback some respite from the weeks’ lows. As reported at 12:44 p.m. (JST) in Tokyo, the U.S. Dollar Index, a gauge of the greenback’s strength versus major currencies, pulled up off a 10-month low struck yesterday to trade at 76.697 .DXY, a .1% gain. Versus the Australian Dollar, the U.S. Dollar also managed to gain strength, trading at $0.9913, a .3% gain, and coming off the 28-year low struck yesterday.
Despite the recent slight gains, most players believe that the weakness in the U.S. Dollar will persist, especially given the likelihood that the Federal Reserve will soon move to include additional QE measures into their policy. One trader commented that the greenback’s slide might be tempered somewhat by the significant accumulation of short positions; according to data released by the CFTC (Commodity Futures Tradition Commission), as of October 5th, $30.5 billion was the value of net short positions in the U.S. currency.
Markets today will turn their attention to the U.S. where Ben Bernanke, Chairman of the U.S. Federal Reserve Bank will speak later today at the Boston Federal Reserve branch policy conference; the speech is scheduled for 8:15 a.m. (EST).