Stock Market Watch

Forex Market Update: Dollar Index Slightly Up

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The U.S. dollar Index rose slightly on Tuesday as lawmakers showed some signs of reaching a stop-gap agreement; however, the U.S. unit is likely to feel the pressure in coming days as the standoff over the budget issue still continues while concerns over possible U.S. debt default will also keep investors wary of taking positive bets on the currency.

At last check, the dollar index, a measure on greenback’s performance against a basket of six major currencies, inched up 0.09% to 79.99.

The WSJ$ Index, whose indexing criteria is slightly broader, ticked higher 0.06% to 72.30.

The dollar received some support on Tuesday after congressional leaders showed some signs of reconcilement.

While President Obama said on Monday that he would agree to a short term increase in the Treasury’s borrowing limit in order to avert debt default, an influential senator was believed to be charting out a plan, which would suggests some spending cuts and  reforms in tax laws as part of broader deal.

“There are a few signs of willingness from the White House and Congress to open up to more constructive discussions, which supports the view that some kind of deal will be reached and has calmed investors’ fears,” said Niels Christensen, currency strategist at Nordea, according to Reuters.

However he warned, “The risk is to the downside for the dollar as long as we don’t have an agreement … There may be some more euro buying if it goes above last week’s high.”








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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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