The Dollar fell dramatically on Monday against a basket of currencies on higher risk appetite. This included slipping to a 3-month low vs. the GBP. The greenback's weakness was due to forecasts that U.S. Interest Rates will be low for the foreseeable future. The other factor playing on optimism yesterday was the recent G20 Meeting in St. Andrews on the weekend in which it was discussed that the global stimulus will only be withdrawn when a solid economic recovery is maintained. This led to an equity market rally in the U.S, which therefore pushed traders to sell-off the USD as the trading day dragged on.
The Dollar finished trading against the GBP lower at the 1.6750 level. This was despite hitting a 3-month low of 1.6842. The USD also lost considerable ground against the European currency in yesterday's trading. The EUR/USD cross closed higher by 40 pips at the 1.4978 level. However, the pair did hit as high as 1.5018 on Monday. The USD/CAD lost considerable ground, as it sunk by 100 pips to the 1.0580 level. The greenback also went bearish against both the Yen and the Swiss Franc.
Looking ahead to today's trading, we have many exciting events. The most significant publication from the U.S. will be the IBD/TIPP Economic Optimism at 15:00 GMT. Also significant will be Federal Reserve Bank of Atlanta President and key Federal Reserve FOMC (Federal Open Market Committee) member Dennis Lockart's speech at 14:15 GMT. Traders will be very much focused on these 2 events, as they are set to be the primary determinants in the USD's strength on Tuesday. It is encouraged that you open big positions in the EUR/USD, AUD/USD, GBP/USD and USD/JPY crosses now.