Dollar Moves Higher
Posted on: Jul 8th, 2009 | By Doug Casey | Filed under US Dollar & Forex Trading
In the currency market, the dollar moved higher again against the euro. Late Tuesday, the euro was trading at $1.3918 vs. $1.3986 on Monday.
The buck has been benefiting lately from weak world equity markets, as investors begin to exhibit greater risk aversion.
The euro got an initial boost as the Economy Ministry in Berlin said German factory orders expanded 4.4% in April. That marked the biggest advance in two years for the zone’s largest economy, but its influence petered out quickly.
A lack of clear direction could be ongoing. “The markets are looking very indecisive at this point,” said T.J. Marta, chief strategist at Marta on the Markets. “It could be the exhaustion of investors and traders, having just priced in — and then out — financial Armageddon. It could also be the cross currents of data, as investors are barraged by conflicting reports.”
There is also caution ahead of the G-8 summit, commencing today in Italy. It’s expected that the meeting will feature renewed debate over whether the U.S. dollar should be replaced as the world’s reserve currency.
The issue isn’t specifically on the agenda for G8 leaders, but officials from Russia and elsewhere have said it will be discussed.
Prefiguring the tone of the discussion, Kremlin aide Arkady Dvorkovich said that, “China and Russia will state their stance that the global currency system needs smooth evolutionary development and this is connected with the creation of several regional reserve currencies, which may then become international.”
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