The Dollar fell to a near 1-month trough versus the common currency Euro following the release of new economic data from the U.S. which only added to the uncertainty revolving around the Federal Reserve Bank’s decision to withdraw or scale back its quantitative easing scheme. With the upcoming Thanksgiving holiday in the U.S. also making for lackluster trade there, analysts say that there is a distinct absence of market conviction at this time thus dollar trade should be quiet and relatively range bound this week.
The EUR/USD briefly hit a session high of $1.3599, a level unseen since October 31st, but resistance at $1.3600 is proving difficult and the pair was recently trading at $1.3593, a gain of 0.2%. The U.S. Dollar Index slipped to 80.534 .DXY before recovering to 80.590 .DXY, moving away from last week’s peak of 81.290 .DXY which was struck on Thursday and closer to the week’s low of 80.532 .DXY which was hit on Wednesday. The USD/JPY edged higher, however, trading at 101.50 Yen, a gain of 0.2% but needing stronger momentum to reach Monday’s peak of 101.91 Yen.
China Land Dispute Could Factor
Investors will be closely monitoring an unfolding situation between China and the U.S. after U.S. planes flew over some disputed airspace without notification; the airspace in question covers islands to which both China and Japan are laying claims. Currency strategists believe that this situation could be a potential market mover, especially given the thin trading, if the tension escalates.