The measures proposed by the U.S. government to support the national financial system and the optimism that followed the announcement of Obamas economic team caused the U.S. dollar to decline against the euro this week as the money risks decreased world-wide.
The U. S. dollar is currently heading for the second negative week against the euro and the British pound and for the third one against the Japanese yen. The developed and emerging countries (including China) showed commitment to continue spending their foreign reserves (denominated mainly in dollars) to boost the economy during the crisis.
The reason behind the growth of the dollar during the recent months lies in the repatriation of the investments during the liquidity crisis. The currency analysts believe that the end of this process is near and the dollar may start to depreciate as the investors will be willing to enter the emerging markets backed by the local governments stimulus.
EUR/USD rose from 1.2899 to 1.2929 as of 7:38 GMT today to the total of 2.5 percent weekly growth. GBP/USD went up from 1.5387 to 1.5424 or 3.1 percent on the weekly scale. USD/JPY declined slightly today — from 95.33 to 95.24, while the weekly drop is currently at 0.7 percent.
If you have any questions, comments or opinions regarding the US Dollar,
feel free to post them using the commentary form below.