Dollar Index Reaches 15 Month Low on Massive Selling Pressure
The U.S. Dollar Index reached a 15 month low on Monday following a massive sell-off against most major currencies. The Dollar has gone down since November 3 when it topped at a 50% price at 77.50. The 2008 bottoms at 73.79 and 73.67 are the next downside targets.
The U.S. Dollar was trounced on Monday after the G-20 finance ministers failed to discuss the value of the Dollar at their week-end meeting, thereby, effectively offering no support. In addition, they decided to keep stimulus measures in place until the global economy can show sustained gains.
The real selling pressure hit the Dollar after an IMF report issued at the meeting said, the Dollar has moved closer to “medium-term equilibrium” but “still remains on the strong side.” This statement was a shot at the Dollar being overvalued versus the Asian currencies particularly the Chinese Yuan. Aggressive traders seized this moment as an opportunity to increase selling pressure on the Dollar overnight and throughout the New York trading session.
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