The U.S currency continued to slip against the EUR yesterday, dropping 1% to as low as 1.3950. It also dropped to its lowest this year against many of its other major currency pairs as worries about swelling U.S. deficits soured investor's appetites on U.S. assets.
The Dollar has fallen every day this week against the EUR and Pound Sterling, and it marked its third straight daily decline against the Japanese Yen yesterday. Analysts attributed the fall in the Dollar, which has been treated as a lower risk, safe-haven investment, to growing optimism that the worst of the financial crisis has passed. This has caused investors to unwind positions in favor of the U.S. currency built up when fear was widespread, credit was frozen and stock markets were in free fall.
A leading indicator released yesterday was U.S. Unemployment Claims. This number handedly beat last week's result. However, it failed to provide strength to the Dollar as investors may be waiting for key data due to be released today to implement their trading strategies.
Looking ahead today, the news event that may have a very large impact on the Dollar and its main currency pairs in today's trading is Federal Reserve Chairman Ben Bernanke's speech at around 18:00 GMT. This speech is very important as it is very likely to Impact the Dollar volatility. Traders are advised to watch closely, as this is likely to set the pace of the Dollar going into next week's trading.