Dollar Holds Onto Last Week’s Losses

The slow return to trading did little to erase last week’s losses for the US Dollar, as investors anticipate a rise in US consumer confidence to be published in tomorrow’s report. A somewhat strong fourth quarter in the US has eroded the pessimism that had been plaguing consumers, and the subsequent rise in confidence has halted the purchase of the greenback. Evaluated numerically, US consumer confidence rose to 58.6 in December, up significantly from 56 in November.

Asian Trading Today
In Asian trading today, the Dollar saw little change from last week, with the currency trading at $1.3041 per Euro. The Dollar Index, which compares the US Dollar against its six most prominent trading partners, dropped 0.2 percent last week. Still, the Index has climbed nearly 10% since its low in May.
The price of gold also remained relatively stable as compared with its prices last week, in advance of tomorrow’s consumer confidence report. Although the price of gold has risen 13% in 2011, a report revealing a stabilizing US economy could cause the metal’s safe haven status to decline.

The Week Ahead
Although this week will be relatively quiet in light of the holiday season, there are several events investors should look out for in the days ahead. In addition to tomorrow’s US consumer confidence report, Italy will sell 9 billion euros of 179-day bills and as much as up to 2.5 billion euros of zero 2013 bonds on Dec. 28. The next day Italy will auction bonds due in 2014, 2018, 2021 and 2022. Poor results at these auctions may put the Euro under selling pressure.

Sara Patterson
Sara Patterson has a Master’s Degree in political science and enjoys analyzing both current events and the international markets to get a fuller perspective of the currency market. Before turning to financial writing, she taught English writing skills to high-school age students. Sara’s work has been published on various financial and Forex blogs.