By: Barbara Zigah
The common currency Euro held close to the December high versus the broadly weakened greenback in Asian trading today. Yesterday, the Euro surged as hedge fund operators drove sales higher, though some traders complained that thin year-end trading is exaggerating the Euro’s rise.
The U.S. Dollar’s recent weakness is being blamed on a drop in yields on U.S. Treasury instruments, coupled with a warning from Moody’s, the rating agency, which suggested that they are considering lowering the United States credit rate from the current AAA standing. Moody’s reported that, should the President’s recently proposed tax cut package be made into law, the rising national debt levels could raise the likelihood for a negative outlook rating.
As reported at 4:22 p.m. (JST) in Tokyo, the Euro traded against the U.S. Dollar at $1.3413, a gain of .2%, and slightly off the Monday peak of $1.3434; traders are expecting to see resistance in the near-term at $1.3452.
The U.S. Dollar Index also slipped on a combination of factors, including China’s refusal to hike interest rates, positive consumer sentiment in the U.S., and investors renewed appetite for higher risk, higher yielding assets. The U.S. Dollar Index, a gauge of the greenback’s strength versus a weighted basket of six major currencies, slipped 1% to trade at 80.07 .DXY.