Dollar Tumbles on All Fronts

on November 17 2009 4:46 AM

The U.S. Dollar fell against all of its major currency pairs yesterday. This was in response to traders dropping the USD, as stocks climbed after U.S. Retail Sales rose more than predicted, and Asian governments pledged to uphold their economic stimulus spending. In October, Retail Sales rose 1.4 %, vs. forecasts of a 0.9 % rise. The equity market rally sent the Standard & Poor's 500 index to a 13-month high, as it rose 1.2% to over 1,105. What is impressive is that according to the U.S. Commerce Department, Retail Sales climbed from a 2.3 % dip in September.

The Dollar fell to a 15- month low against currency pairs such as the Pound. This is as the pair rose by as much as 165 pips to the 1.6876 level. The USD/JPY cross also dropped significantly yesterday by 52 pips to the 89.04 mark. The EUR/USD pair rose by 20 pips to the 1.4985 level. In addition, the greenback lost ground against the Canadian Dollar as the trading day dragged on. The U.S. Dollar Index, which tracks the currency vs. America's largest trading partners, fell by 0.7 % to 74.834, after reaching 74.679. This was the lowest level since August 2008.

Looking ahead to today, there is much exciting economic news that is set to be published from the U.S. The most significant of these will be the PPI and Core PPI at 13:30 GMT, the TIC Long-Term Purchases at 14:00 GMT and the Industrial Production publication at 14:15 GMT. All of these releases are set to have a very high impact on both the volatility and strength of the USD. The forex market is expected to go extremely volatile before, during and after these publications. Therefore, it is advised that you open your positions in the Dollar whilst the opportunity is available to make big returns today.

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