Stock Market Watch

Forex Market Update: Dollar Index Inches Up

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The U.S. dollar traded higher against most of the major currencies on Friday as recent spike in yields of benchmark 10-year treasury boosted the demand for dollar; nevertheless, it eased against the euro after a top official from the European Central Bank (ECB) ruled out any possible interest-rate cuts in the backdrop of improving macroeconomic environment in the euro zone.

At last check, the Dollar Index, a measure on U.S. unit’s performance vis-à-vis a basket of rival currencies, inched up 0.07% to 81.54.

The WSJ$ Index, which has slightly broader indexing criteria, rose 0.15% to 74.04.

Against the euro, the dollar was last up 0.03% to trade at $1.3353

Earlier today, a top policymaker from the ECB, Ewald Nowotny said that he did not see much reason for the bank to further slash the benchmark rate.

The remark comes a day after when an economic survey showed that manufacturing activities expanded at better-than-expected rate in the euro zone in August. Besides, manufacturing activities in Europe’s growth engine, Germany, also expanded at a faster-than-expected rate in August.

Still, the dollar is likely to bounce back against the euro as the speculation is widespread that the Federal Reserve might start winding down of the

“The euro seems irrepressible at the moment, but we think the Fed normalisation story will win out for the dollar,” said Chris Turner, head of currency strategy at ING, according to Reuters.

Meanwhile, market participants will keep a close eye on new home sales data on Friday as any strength in the numbers might further boost the U.S. unit.








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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.

Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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