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Yesterday, the Greenback experienced a major slide against a large basket of currencies
Thu, Jul 3 2008, 12:29 GMT
by Wachovia Research Team
Yesterday, the Greenback experienced a major slide against a large basket of currencies as it lost at least 0.5% against the Queen currencies (EUR, GBP, AUD, NZD) and around 1% against JPY, CAD and CHF. The USD fall seems to be attributed to general market trends continuing with oil trading to new highs and domestic equities falling as the DJ erased all of its gains from the day before.
From yesterday's NY close, the EUR hit a two month high against the USD ahead of today's ECB rate decision and US employment numbers in the form of an early non-farm payrolls number. The USD also fell to a recent low against the SEK as Riksbank, the Swedish Central Bank, raised it main lending rate by 25 bps to 4.50% with future hikes indicated in the post meeting commentary. AUD and NZD both rallied on high energy prices, falling domestic equities and speculation that the yield advantage between the US and the respective countries will continue in the coming months. GBP was one of a few currencies that the USD advanced against as the UK services PMI came in lower than expectations. Oil also continued its climb as it reached a new record high at 145.85 per barrel on the USD weakness and increasing tension between Iran and Israel.
Prior to print, the ECB raised rates 25 bps to 4.25% but as it was priced into the market we have not seen to large of a reaction. Ahead today, non-farm payrolls are expected to drop for the six month as employers cut 60,000 jobs. If the number comes out worse than expected we could see the EUR break to new highs. Early next week, G8 leaders will meet and are expected to discuss the weak dollar's contribution to high oil prices which could place a soft ceiling on the continued USD weakness.
Published on Thu, Jul 3 2008, 12:33 GMT
Archive
- The Korean Won climbed to one week high against the USD
Published On Mon, Oct 13 2008, 12:52 GMT - Equities plunged yesterday and overnight
Published On Fri, Oct 10 2008, 13:35 GMT - The markets had mixed reactions to yesterday's unilateral central bank rate cuts
Published On Thu, Oct 9 2008, 12:13 GMT - Economic data out today includes pending home sales and MBA mortgage applications numbers
Published On Wed, Oct 8 2008, 12:24 GMT - The British pound fell to its lowest level against the dollar in 2 ½ years
Published On Tue, Oct 7 2008, 13:43 GMT
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