Dollar Lower Against Yen

By IBTimes Staff Reporter | January 13 2010 3:04 AM

The US Dollar was trading lower against the EUR yesterday as traders stayed away from riskier assets such as equities and crude oil, opting for the safety of the Yen. In addition to the new banking restrictions in China, concerns over the sovereign debt of Greece did little to increase traders' risk appetite.

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At the end of the trading day, the EUR/USD traded at 1.4472 from an opening price of 1.4482.

An absence of significant data releases on the economic calendar had trades being driven on the most recent key data, last Friday's U.S. Non-Farm Payrolls report. The lack of job creation in the U.S. economy may eventually become a stumbling block for the USD to overcome. However, at this time the economies of Europe, Great Britain and Japan don't appear to be improving much either.

Today's trading may be influenced by the release of the U.S. Federal Budget Balance. The deficit is expected to be -84.9B dollars. This is a major contention for fundamental traders regarding the value of the USD. The US government has not been able to reduce the budget deficit due to two major wars and an economy that is on life support.

Much of the recent U.S. economic growth is due to government surplus money. This situation cannot go on forever. When the government begins to be more fiscally responsible, we could see a drop in the value of the USD.