Higher Risk Currencies Edge up over Safe Haven USD

By: Barbara Zigah

The Canadian Dollar rose against the greenback in early trading in New York, as recent comments by the president of the European Central Bank encouraged investment into higher risk currencies. As reported at 8:57 a.m. (EST) in New York, the U.S. Dollar stood at C$1.0188, off from yesterday’s late trade of C$1.0256.

Investor risk appetite whetted, the Euro also managed to regain earlier losses against the U.S. Dollar, trading at $1.3129 this morning, up from the $1.2979 trade late yesterday on the EBS trading platform. Some analysts are suggesting, however, that the markets are reacting more to the positive monthly manufacturing data coming out of China, than to any alleviation of Eurozone concerns. China reported that manufacturing output rose last month, the 21st consecutive gain in that sector.

In the short term, the Euro is likely to stabilize, due in part to efforts by Jean-Claude Trichet to quell investor concerns over procedural issues; however, markets will anxiously wait for the outcome of Thursday’s ECB meeting, but appear encouraged that the ECB is ready to act if necessary. Some analysts suggest that the ECB might purchase additional peripheral bonds, an attempt to drive interest rates lower, which might encourage investors to abandon some short-term Euro-negative hedges.

Barbara Zigah

After working on Wall Street, Barb began her second career as a freelance writer at Daily Forex, where the CEO recognized fresh, untapped potential and was willing to give her a try. She’s never looked back. Since then, she’s worked steadily as a freelance writer and editor in the financial services and Forex-related industry.