The dollar today came under renewed selling pressure after fears of a US recession and expectations for further aggressive cuts in interest rates by the Feds is driving the dollar to lows against the euro and Japanese yen. And as we all know, lower interest rates typically weakens a currency as they eat into the return on assets dominated by that currency.
Meanwhile, the euro drifted lower today against the US dollar today after President of ECB, Mr. Trichet warned about excessive volatility in currency markets pushing the pair to record a low of 1.5313 and a high of 1.5400. The ECB last week decided to keep interest rates unchanged at 4% due to rising inflationary pressures.
The UK data showed today that input prices for manufacturers continued to soar and UK inflation data pointing to a continued price pressures due to high food and energy prices. The Bank of England therefore which has cut rates twice before voted to keep rates on hold at 5.25% rising concerns that soaring prices would boost consumer inflation. As for this hour, the GBP is fluctuating within thin ranges dragging the pair with it to record a high of 2.0220 and a low of 2.0151.
Finally, the dollar continues to fluctuate within narrow ranges dragging the pair with it to record a high of 102.44 and a low of 101.59
Join the Discussion