Dollar Advances on Stocks Weak Performance

The dollar gained versus most of the 16 main traded currencies today as speculations surged that current levels for stocks are not backed by fundamental evidences, forcing equities down and bringing investors to purchase Treasury bonds to protect their portfolios.

Refuge currencies had the best performance today as most equities markets in Asia and Europe tumbled, attracting traders to inject capital towards safety, providing support for the greenback and the yen to extend gains from yesterday. Despite the dollar’s good performance versus most higher-yielding currencies, the greenback is facing its fourth consecutive week losing to the yen, as the interest rate outlook in the U.S. remains less optimistic than the one expected from the Bank of Japan, helping the yen to be the top refuge currency at the moment, as the Swiss Franc is losing its attractiveness due speculations regarding future regulations in the country’s financial system.

As the year is ending a number of traders are repatriating assets and giving up, to some extent, riskier investments, favoring the U.S. dollar who had a rather positive week compared to the previous ones, where risk appetite was dominant most of the time. There is a significant chance that the greenback will be trading around $1.50 versus the euro until the end of the year.

EUR/USD traded at 1.4847 as of 17:52 GMT from a previous price of 1.4912. USD/JPY traded at 88.99 from almost the same rate in the intraday.

If you have any questions, comments or opinions regarding the US Dollar,
feel free to post them using the commentary form below.