USD Graphic Rewind 05.17
USD INDEX GRAPHIC REWIND
The dollar index (DXY) maintained a firmly bid tone throughout Friday’s trade and into the new week as negative trends continue to weigh on the euro and risk appetite. The Euro crashed to a four-year low early in Asian trade pushing the DXY to fresh multi-year highs. The Pound is another big loser against the dollar, the new coalition government continues to point fingers at Labour’s undocumented spending as the reason for the budget deficit but is failing to convince markets they will be able to slash the huge budget deficit. The theme of how and when governments will start slashing budgets lingered over Friday’s trade and led to broad dollar strength. Players are also concerned that as governments do implement austerity measures, growth is likely to be hampered, slowing the global recovery, even possibly allowing for a double-dip in some economies.
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