Stock Market Watch

Forex Market Update: Dollar Index Near Seven Month Low, Yen Falls Sharply

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The dollar index hovered near its seven month low on Thursday as investors continued to cut positions on the U.S. unit after the Federal Reserve surprised everyone by continuing with its $85 billion worth bond purchase program.

The dollar Index, a measure on U.S. dollar’s performance against a basket of six major currencies, fell 0.12% to 80.18, not too far from its previous session low of 80.060, which was its seven-month low.  The dollar index fell 1.1% on Wednesday, which was its biggest one-day slide in more than last eight weeks.

The Fed’s easy money policy means that higher yielding currencies such as euro, Swiss franc or sterling will be in higher demand.

“U.S. yields are lower and it makes sense to move out of dollars into the euro and sterling,” said Jeremy Stretch, head of currency strategy at CIBC World Markets, according to Reuters.

“By the time we have the European Central Bank meeting early next month, we could have the euro at $1.37 which will pose a headache to (European Central Bank’s President) Draghi.”

Meanwhile, the yen tumbled. The Fed’s unexpected policy resulted in large-scale repositioning of assets. The Japanese currency fell to a 23-year low against another safe-haven currency, Swiss franc on Thursday, showed a data provided by Reuters. Against the euro, the yen fell to its 31/2 half year trough.

At last check, the yen was down 1.26% against the dollar to trade at 99.17 yen.








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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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