By TraderVox.com
Tradervox.com (Dublin) – The US dollar was near two-week low against the euro prior to a report expected to show that US economy expanded slowest in a year. Dollar’s demand was also clipped by the gains in global stock yesterday, which increased the demand for riskier assets. The dollar was also down as speculations of a third round of quantitative easing rose in the market. The euro strengthened for the third day against the dollar and the Japanese currency as European Central Bank President Mario Draghi indicated that the bank will do whatever is necessary to protect the euro.
Robert Rennie who is the Chief Currency Strategist in Sydney at Westpac Banking Corp indicated that the market might be headed for a short term risk-on period as there are signs of combined additional stimulus from the Fed and the ECB. The continued release of poor data from the US, has spurred speculations of QE3 while ECB council member has hinted that there are arguments in favor of giving ESM a banking license which would give it unlimited firepower to fight euro zone debt crisis. In addition, Draghi’s comment on commitment to fighting the euro crisis comes just a week after Fed Chairman Ben S. Bernanke indicated that the Fed is looking for ways to address weaknesses in the US economy.
The US Gross Domestic Product report, which shows the value of goods and services produced by the US, is projected to have expanded by 1.4 percent in the second quarter down from 1.9 expansion in the first quarter of the year. The dollar closed the day yesterday in New York at $1.2330 against the euro, which is the weakest it has been since July 10. It was trading at $1.2281 against the euro during the Tokyo trading session today. The dollar is set for a weekly drop against the euro as it has fallen one percent this week. Against the yen, the greenback was little changed at 78.23 from 78.21 yen, it has fallen by 0.3 percent against the yen this week.
Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management.
Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox
