By: Barbara Zigah
The U.S. Dollar continues to be under significant pressure following last week’s commitment by the Federal Reserve Bank to hold interest rates at their current ultra low level through 2014. The greenback remained within striking distance of a 3-month low against the Japanese Yen, and thanks to a continuing sell-off by Japanese exporters and hedge funds, is on track to record a 5th straight loss. A currency analyst in Tokyo believes that the pressure will remain until January’s non-farms payroll data is announced on Friday; analysts are forecasting that the numbers will decline to 150,000 new jobs but that data could be modified dependent upon the outcome of the ADP data release later today.
The Euro, on the other hand has lost more steam against the U.S. Dollar, dropping to $1.3069, a decline of 0.1% from the overnight trade. Greece appears closer to securing a deal with private bondholders while the ECB appears to be resisting a similar fate. The Euro sell-off had suggested to some analysts that the Euro’s recent run which resulted in a 1% gain in January is being corrected. One analyst believes that the inability for the Euro-Dollar to break through major resistance at $1.3244 could mark the return of risk aversion and thus a decidedly bearish sentiment.