Stock Market Watch

Forex Market Update: Dollar Index Eases as Investors Book Profits

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The U.S. dollar index eased on Monday, as investors booked profits after the index climbed to a 3-year high in the Asian trading session.; nonetheless, market analysts expect the U.S. dollar to carry on its uptrend amid rising speculation that the Federal Reserve would soon start to taper its multi-billion dollar bond purchase program.

On Friday, the Labor Department’s monthly non-farm payrolls data showed more-than-expected job additions in June, fanning speculation of early tapering of QE3.

While CNBC’s latest poll showed that economists expect the winding up of QE3 to start by November, some analysts, according Reuters anticipate the scaling down could start as early as September.

The U.S. dollar index, a gauge on U.S. unit’s performance against a basket of six major traded currencies, edged down 0.25% to 84.341, having hit a session high of  84.588, its highest level since July 2010—showed a data provided by Reuters.

Commenting over the dollar’s pause, Ulrich Leuchtmann, head of FX research at Commerzbank, said, “The dollar’s strength over the course of last week was especially swift, I think the speed was overdone and so this setback is normal,” said Ulrich Leuchtmann, head of FX research at Commerzbank. “Now markets are positioned to take profits from these moves, but this is simply a pause,” according to Reuters.

Meanwhile the euro turned sharply higher against the U.S. dollar amid news reports that Greece will receive its next tranche of financial aid from international investors.

At last check, the euro gained 0.30% against the dollar to trade at $1.2849.

 








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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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