Dollar drops after Obama's announcement

By @ibtimes on

The US dollar waned against a basket of major currencies after Obama's announcement to resume tax cuts and his call for lower payroll taxes.

The greenback lost its strong pace witnessed in November with pressures from officials as Ben Bernanke, the Fed chairman, said adding to the $600 billion QE2 announced last month is possible.

Also, the weak jobs data released last week underscored some concerns as unemployment climbed to 9.8% while Bernanke said it will take more than five years for jobless rate to fall down to normal levels.

Gold rose to new record high while oil exceeded that $90 barrier, taking advantage of the dollar's drop.

The dollar index, which tracks the dollar performance against a basket of major currencies, slipped to a low of 79.19 from the day's opening at 79.64.

On the other hand, tensions in European markets eased today on expectations Ireland will approve the 85 billion-euro bailout today in parliament.

The previous day, European Finance Ministers in their meeting in Brussels agreed to rule out any rescue for Portugal and Spain or to expand the 750 billion-euro package announced in May, while Germany rejected issuing European joint bonds.

The news that Portugal and Spain may not need a bailout calmed markets causing bond yields to retreat and the euro to rebound, yet there are some doubts they will ask for surveillance package.

Concerning the euro-dollar pair, it rebounded on the daily basis paring most of losses incurred over the prior session but it is struggling to remain above strong resistance at 1.3368.

Meanwhile, the pair is trading at 1.3380 after recording a high of 1.3400 and a low of 1.3274, while the trading range for today is among the key support at 1.3230 and the key resistance at 1.3600.

Moving to the royal pair, it is showing incline after getting a boost from manufacturing data which rose to 0.6% in October from the revised 0.2% in September.

The pair is currently trading at 1.5800 after recording a high of 1.5821 and a low of 1.5700, while the trading range for today is among the key support at 1.5650 and the key resistance at 1.5975.

With regard to the dollar-yen pair, it rebounded as the yen dipped from its highest level in three weeks against the green currency to touch a high of 82.88 while the lowest point was hit at 82.32.

The trading range for today is among the key support at 81.05 and the key resistance at 84.25.

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