Tags: Dollar | Rises | Plunge | Fed | Outlook

Dollar Rises on Bets That Plunge Over Fed Outlook Will Be Hard to Sustain

Friday, 15 Oct 2010 11:09 AM

The dollar advanced from an eight-month low against the euro and traded higher than a 15-year low versus the yen as technical indicators suggested the plunge in the dollar in the past six weeks may be hard to sustain.

The U.S. currency slumped earlier versus the euro and yen and dropped to parity with the Australian dollar after Federal Reserve Chairman Ben S. Bernanke said additional monetary stimulus may be warranted because inflation is too low and unemployment is too high.

“He hasn’t really changed the outlook too much for Fed policy,” said Omer Esiner, chief market analyst in Washington at Commonwealth Foreign Exchange Inc., a currency brokerage. “A lot of this news is already priced in.”

The dollar rose for the first time in four days against the euro, gaining 0.4 percent to $1.4020, from $1.4084. It slid earlier to $1.4159, the weakest level since Jan. 26. The dollar traded at 81.37 yen, compared with 81.48, after falling to 80.88, the weakest level since April 1995, when it reached the post World War II low of 79.75 yen. The euro fell 0.6 percent to 114.09 yen, from 114.76.

The 14-day relative strength index of the euro against dollar stayed above 70 for a 14th day in the longest stretch since March 2008. Readings higher than that level indicate the euro may be poised for a decline after rallying more than 10 percent since the end of August. The relative strength index of the yen versus the dollar stayed above 70 for a sixth day.

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The dollar advanced from an eight-month low against the euro and traded higher than a 15-year low versus the yen as technical indicators suggested the plunge in the dollar in the past six weeks may be hard to sustain.The U.S. currency slumped earlier versus the euro and yen...
Dollar,Rises,Plunge,Fed,Outlook
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2010-09-15
Friday, 15 Oct 2010 11:09 AM
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