Technicals

The Dollar edged higher on Thursday against Sterling and Swiss franc as short term interest rates for Dollars continued to rise on global money markets, despite coordinated efforts by many central banks this week to ease the credit crisis.

Despite unprecedented efforts by central banks to increase liquidity in money markets and lower borrowing costs, the fear of further bank failures continued to slow inter-bank lending and led corporations, funds, and banks to accumulate Dollars.

Yesterday, EurUsd rose 0.19% at 1.1312. UsdJpy was down 0.72% at 99.04, after dropping to a 6-month 98.51 low. UsdChf rose 0.19% to 1.1312. GbpUsd dropped 1.14% to 1.7029 having posted 1.7397 high.

Dollar is mostly under pressure ahead of Group of Seven meeting of finance ministers and central bankers on Friday in Washington would follow Wednesday's coordinated rate cuts with bold steps to unblock the flow of credit in global markets. Markets are looking to the G7 meeting, as well as a broader meeting of G20 countries over the weekend, for a more coordinated approach to the global financial crisis. Markets also expect central banks around the world to cut rates further after the Fed, the ECB and the central banks of Canada, England, China, Sweden and Switzerland cut rates simultaneously on Wednesday.

US stocks fell to new five year lows, Dow Jones industrial closing below 9000 for the 1st time since June 2003, and long dated US Treasury bond yields rose, while investors in emerging markets ran to the safety of Dollars and even Gold in risk aversion.