The recent statement by the ECB representatives gives a serious blow to US dollar. Dollar closed at a lower rate at the end of the last trading week. The roots of this decrease can be traced back to the upsets in Chinese market. At the beginning of this trading week, China introduced some measures that stabilized dollar to some extent. But, the statement from the ECB personnel is telling something more. They are trying to convince the world that China is not the sole competitor against US dollar in Forex trading. Europe’s Euro has also got the potential to disturb the market and to set new trends.
Smaghi’s statement that ECB could raise interest rates is unjustified to much extent. ECB has been setting new records in lending money with the help of overnight lending plans. Critics find no reason to increase the interest rates in this scenario. The causes they have ascribed for the rising inflation are also subject to great controversy. Smaghi’s statement in these circumstances is just meant for exerting the power of ECB and the Euro to the whole world. The continuous down trend in dollar is alarming. Seems that a series of factors that may influence dollar directly or indirectly, are unleashing one after the other. Even Americans are now criticizing Bernanke and his dual policies very seriously. They are blaming him to penetrate dollar too much into the developing countries and making fake claims about the real targets and causes of renaissance policies.
The ECB statement has made Euro very volatile as well, as is evident from Friday’s trading session. But, experts are not much worried about this fluctuation. However, US dollar is going to give tough time to the traders and the experts as well.
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Daily forex trading news written by Rehan from DailyForexTrade.com