On Wednesday, September 03, 2008, the U.S. Dollar continued its run of price increases, reaching its highest price in over 11-months against major currencies. The greenback’s rise continues as investors start to regain lost confidence in the U.S. currency, even amid a backdrop of worsening global economies.
A drop in oil prices to $110 a barrel also propped up the U.S. Dollar, generally at the expense of higher yielding currencies. The drop in oil prices is largely attributed to the downgrading of Hurricane Gustav, and the fact that the Gulf of Mexico’s many energy facilities were untouched by the weakening storm.
Analysts stated that investors were getting behind the U.S. currency, acknowledging that it was a safer option than other currencies from countries farther behind in respect of their economic readjustment to the global liquidity crisis.
U.S. factories orders also helped to push up the U.S. Dollar against the Euro. The United States Commerce Department reported an increase of 1.3% in new factor orders over the previous month. This increase was larger than the increase originally anticipated by economists, which was a modest 1% gain over July’s figures.