By: Barbara Zigah
Continuing investor doubts about the direction of interest rates in the United States has whetted investor appetite for higher risk currencies and caused the U.S. Dollar Index to fall to a new 14-month low in Asian trading today. As reported at 3:23 p.m. (JST) in Tokyo, the U.S. Dollar Index dropped to 75.551 .DXY, the lowest trade in more than a year. Higher yielding currencies benefited from the U.S. Dollar’s decline; the Australian Dollar gained .5% to trade at $9.9145, establishing a new 14-month high, and the single currency Euro traded at $1.4891, an increase of .2% and the highest in 14-months.
Yesterday, the Vice Chairman of the U.S. Federal Reserve Bank, Donald Kohn, commented that he didn’t see the American economy rebounding quickly from the deep recession; investors interpret that to mean that the Federal Reserve intends to hold key interest rates, already at an historic low, at current levels.
Analysts are awaiting the release of consumer data from the United States which will be released later today. Based on a survey of 78 economists, it is expected that September’s retail sales figures will show a decline of 2.1%, an indication that the consumer-driven economy will continue to struggle, thus ensuring that the Fed will keep interest rates low in an attempt to spur on consumer spending.
U.S. Dollar Slips Broadly in Tokyo
After working on Wall Street, Barb began her second career as a freelance writer at Daily Forex, where the CEO recognized fresh, untapped potential and was willing to give her a try. She’s never looked back. Since then, she’s worked steadily as a freelance writer and editor in the financial services and Forex-related industry.