U.S. Dollar Fails to Sustain Upside Momentum
The U.S. Dollar tried to mount a comeback at the mid-session but failed to sustain upside momentum and finished the day down but off the low. The Dollar was down most of the day and traders renewed interest in riskier assets on optimism that the Dubai World credit issue would resolve itself. Investors seemed tentative to pound the Dollar lower which could be an indication that problems are not over. Breaking last week’s Dollar Index low at 74.27 will be an indication that global investors consider this matter to be a local issue rather than a possible international calamity.
Today’s better than expected Institute for Supply Management-Chicago business index also helped hold the Dollar in check.
A rise in consumer prices helped boost the EUR USD overnight but the inability to take out the recent high for the year at 1.5144 is helping to generate new selling pressure. The main trend will turn down when 1.4801 is penetrated. The return of an appetite for risk driven market will help the Euro maintain its upside momentum.
