USD Graphic Rewind: Dollar Index Takes Out 2010 Low As Eur/Usd Soars
The dollar index finally took out the 2010 low at 75.62 posting a low of 75.53 on Friday as the euro raced higher on the back of comments by ECB President Trichet. Trichet said that there was no change in policy to speak of in the wake of the earthquake and tsunami in Japan. While some had efforted the possibility that the ECB and others would ease their tightening bias as global growth is expected to take a knock as a result of the Japan disaster. However, after Trichet’s comments speculative trade continues to drive the euro higher in anticipation of imminent rate hikes by the ECB.
The beleaguered buck continues to lose ground across the board as investors shun the US’s strengthening fundamental landscape in favour of currencies offering a higher yield. As the Fed remains highly accommodative in the face of some other central banks’ tightening bias the greenback is always likely to remain under the cosh.
Written by Jonathan Granby, DailyFX Research Team
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.