The Dollar rose against most of its major counterparts during yesterday's trading session. The Dollar strengthened against the Euro and the Pound, and the GBP/USD pair dropped to the 1.4950 level.
The Dollar gained against most of the major currencies as renewed concerns regarding European debts drove investors to look far safer assets such as the Dollar and the Yen. In addition, the start of the U.S. second-quarter earning season has supported the Dollar as well. There is currently pessimism about corporate outlooks as U.S. companies begin reporting second-quarter results this week. The combination of concerns regarding the economic condition of several Euro-Zone nations, combined with the pessimism in U.S. corporations' profits has reduced risk appetite in the market. This was concluded with modest gains for the Dollar.
Looking ahead to today, many interesting publications are expected from the U.S. economy. The report which might have the strongest impact on the market seems to be the Trade Balance. The Trade Balance measures the difference between imported and exported goods and services. Analysts have forecasted that the U.S. trade deficit has narrowed to 39.3B during May, from 40.3B on April. If the end result will beat expectations, the Dollar could rise further. In addition, traders are advised to follow the Federal Budget Balance. Current expectations are that the federal government's deficit narrowed to 70.0B on June, from 135.9B on April. If the actual result will be similar, the Dollar might strengthen as a result.