By: DailyForex.com
The U.S. Dollar Index continues to hold close to a multi-month low and analysts believe the pressure on it will continue to remain, following the Fed’s announcement last week that they would embark on an open-ended round of economic stimulus.
As at 2:13 p.m. (JST) in Tokyo, the Index was trading at 78.802 .DXY, recovering from Friday’s 7-month low of 78.601 .DXY; since July’s 2-year peak of 84.100 .DXY, the index has lost nearly 6% dropping. The U.S. Dollar was also lower against the Euro, trading at $1.3128, close to the low of $1.3169, a 4-month peak struck on the EBS trading platform last week. Since July, the EUR/USD pair has gained nearly 6% and analysts believe that it has some more room to grow in the short term. One forex strategist in Hong Kong believes that the momentum for the risk rally is likely to hold.
Last week, the U.S. Federal Reserve launched another round of stimulus, promising to buy U.S.-backed assets worth $40 billion each month until there is notable improvement in the U.S. job markets. Only the week before, the European Central Bank announced its own version of open-ended asset purchases in an effort to put a halt to the growing crisis among the financially distressed members of the E.U.