The U.S. Dollar hit a one year high against the Euro and a group of currencies due to U.S. investors repatriating overseas investments amid escalating concerns about global economic growth. According to the July figures, the U.S. trade deficit widened to a level not expected by most economists, and as a result, the U.S. Dollar was under pressure against the Japanese Yen.
Concerns about slower global economic growth have prompted U.S. investors to liquidate their positions in foreign investments and move the funds back to the United States. This action has increased the demand for the U.S. Dollar.
New Zealand authorities cut interest rates by unexpected 50 basis points and as a result the Kiwi Dollar fell to a 2-year low versus the U.S. Dollar. The Euro fell to $1.3891, down from $1.3920 the previous day and the lowest since September 2007
According to the Reuters data, the ICE Futures United States Dollar index, a measure of the U.S. Dollar's value versus a basket of 6 major currencies, jumped by 80.375 DXY, the highest level since September 2007.
Comments by Jean-Claude Juncker, of the Eurogroup, that the Euro is overvalued in real terms, added more pressure to the Euro. Analysts believe that there is more scope for further losses.