US Dollar Selling Accelerates - Currency Traders may push Euro to Further Record Highs

The euro showed little hesitation in setting fresh record-highs of $1.4392 through the New York afternoon, and the British pound initially joined the euro in setting significant peaks in earlier trade. Yet continued speculation of Bank of England interest rate cuts sunk the high-flying currency to intraday lows of $2.0480. The downtrodden Japanese Yen was among the few currencies to remain relatively unchanged against the US dollar, as the greenback traded at 114.00 yen through time of writing.

Disappointments in University of Michigan Consumer Confidence figures further exacerbated fears of a consumer-led recession in the world’s largest economy. October surveys showed that consumer confidence hit its lowest since June, 2006, as US residents grew further pessimistic on economic growth prospects. Stock market tumbles undoubtedly played a hand in such deterioration, and further market routs could only accelerate the worsening in sentiment.

Equity markets shrugged off consumer confidence numbers and saw soft bids on Friday trade, with the Dow Jones Industrial Average trading 72 points improved to 13,745. Strong earnings from Microsoft pushed the tech-heavy NASDAQ Composite an impressive 1.3 percent higher to 2,786, while the highly diversified S&P 500 traded 0.8 percent up at 1,526. 

US Treasury bond yields continued their recent decline, with the 2-Year note losing 2 basis points to 3.74 percent. Continued fears of US economic recession have left shorter-dated yields at multi-year lows, while the 10-year Note shed a lesser 1bp to 4.37 percent.

Written by David Rodríguez, Currency Analyst for DailyFX.com