U.S. Dollar Strengthens Broadly

By: Barbara Zigah

The U.S. Dollar continues to strengthen broadly, this time touching on a 1-month peak versus the Euro and an 11-month peak versus the Japanese Yen. The bullish dollar sentiment is finding support by growing optimism that the recovery of the U.S. economy is clearly on track. The dollar is also finding support relative to other currencies by virtue of their own deficiencies; for the Euro, the debt crisis continues to plague the common currency, while commodity-linked currencies such as the Aussie under pressure as growth concerns in China weigh. The Bank of Japan’s commitment to a softer Yen is also weighing on the safe haven currency.

The U.S. Dollar Index, which gauges the greenback’s value against a weighted basket of major currencies, struck a 2-month high in the Asian session, trading at 80.738 .DXY before retreating to 80.62 .DXY. As reported at 12:07 pm. (JST) in Tokyo, the EUR/USD pair was earlier trading at $1.3004, a 1-month low but has since recovered to $1.3025; support can be seen at around $1.2973. The Aussie Dollar struck an 8-week trough against the greenback, dropping to $1.0424 while the USD/JPY pair fell to 83.0615 before recovering to 83.40.

Markets will shift their focus to Switzerland later today as the SNB makes a critical decision on policy. Investors are keen to see if the SNB will raise the floor under the Swiss Franc.
 

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.