The U.S. Dollar closed lower against most major currencies this afternoon as investor demand for higher yields drove up risky assets. The strong rally continued in the equity markets boosted by yesterday’s favorable comments from Fed Chairman Bernanke and today’s positive words from investor Warren Buffett. Gold also surged to the upside on the prospect of a long-term weaker Dollar.
Despite economic reports showing that the U.S. economy is recovering at a faster pace than the Euro Zone, investors continued to drive the December Euro higher for the year.
Today’s weakness in the December British Pound reflected the floundering economy. Earlier in the week it was concerns over a squeeze in the U.K. mortgage rates having a negative effect on the real estate market. Today it was a poor unemployment report encouraging the sellers. .
The December Japanese Yen finished higher but heavy buying pressure seems to be subsiding as traders appear to be defending the 1.10 area. Overbought conditions could also be providing resistance by attracting sellers.
Strong rallies in equity and energy markets have helped trigger a resumption of the uptrend in the December Canadian Dollar.
December Gold rallied to a new high for year as the Dollar weakened throughout the day. The long-term charts indicate plenty of room to the upside. The only worry should be a turnaround in the Dollar. Strong demand from Asia is helping to boost prices.
The demand for higher risk assets spilled over to the energy complex today, triggering a rally in December Crude Oil. News that supply had dropped also helped boost prices. Traders are beginning to get bullish again as global economies return to growth.
December Corn and November Soybeans backed off a little today after yesterday’s strong rally. News of the threat of an early frost helped trigger a short-covering rally yesterday. Today’s action seems to be more related to profit-taking rather than fresh selling. One sign that there is demand for these crops will be strong buying on the current retracement.
