The Dollar fell to a fresh 14-month low against most of it major currency pairs yesterday, as solid earnings by JP Morgan Chase, and rising stock and commodity prices stoked optimism for an improving global economy. By yesterday's close, the USD fell against the EUR, pushing the oft-traded currency pair to 1.4959. The Dollar experienced similar behavior against the GBP and closed at 1.6054.
The Dollar, which has been a safe-haven investment previously, was hit by the sharp rise in profit reported by JP Morgan Chase, as well as forecast-beating earnings from Intel Corp late on Tuesday. These factors all helped brighten the economic outlook, and encouraged investors to move into perceived riskier and higher-yielding currencies.
The greenback also remained under broad selling pressure on expectations that U.S. Interest Rates will stay at very low levels for some time, following comments by Federal Reserve Vice Chairman Donald Kohn on Tuesday. Low rates reduce the attractiveness of U.S. assets and ease demand for the Dollars to buy them.
Looking ahead to today, the two main news events that may have a very large impact on the Dollar and its main currency pairs in today's trading are the Core CPI and Unemployment Claims at 12:30 GMT. These reports are very important, as they are likely to greatly impact the value of the USD. Traders should pay close attention to the market as there is an opportunity for traders to capitalize on the fluctuations which are likely to follow today's key data publications.