The USD received some support from decreased oil prices
The United States dollar kept its high positions supported by decreasing oil prices and several certain announcements from the Federal Reserve. The oil prices have decrease below the $130 a barrel point and the Charles Plosser at the Fed made his announcement concerning the possible inflation. Due to his words growing inflation could cause the Federal Reserve to increase interest rates before any recovery at the labor and financial markets and this is quite supportive for the USD. Moreover the USD was also supported from the announcement of the Hank Paulson – US Treasury Secretary who said about the importance of the strong currency.
Furthermore the USD has finally stopped its moving in relation to the Japanese Yen. According to the latest forex data the Euro was traded at the point of $1.5772 and the USD added to the point of 107.63 Japanese Yen. However the growth of the USD didn’t cause traders to move USD further higher before the issue of the certain housing data later in the week. It will be US existing and new home sales data.
The next point to be singled out is whether other Federal Reserve officials will support the position taken by the Plosser. According to James Hughes at CMC Markets there is almost no other interesting news except of the Plosser announcement and the expectation of the market for Plosser’s colleague speech. Frederic Mishkin will have an announcement at a Bank of Canada economic conference. It is supposed that he will follow Plosser’s thoughts.
As for the other currencies the most popular these days is the British pound. The final decision concerning interest rates is not issued yet. However it was expected that the Bank of England will likely leave interest rate at the same level.
Due to Naeem Wahid – currency strategist at HBOS any additional voting of the Bank of England concerning interest rate decision will be quite negative for the currency itself no matter whether it will be aimed at the growth of the interest rate or at its decrease. Due to the latest forex trades data the British pound was traded at $1.9923 and the Euro – 0.7914 British pounds.
