The U.S. dollar enjoyed gains against major Latin American currencies today, against the backdrop the Federal Reserve was going to keep interest rates where they're at, with no plan on raising them any time soon.
Today's gains were against the Chilean peso, Peruvian Sol, Brazilian real, Mexican Peso and Colombian peso.
With the Chilean peso, the dollar increased as high as a two-month high of 515.13, although falling back close to the end of the session.
Against the Peruvian sol, the greenback rose to a two-week high of 2.8350, in contrast to the 2.7725 close on Monday.
The dollar advanced for an 8-day high against the Brazilian real, quickly jumping to 1.5775 at about 9:00 am EST.
With the Mexican peso it also got off to a quick start in the morning, as it grew from its poor performance yesterday of 8.8568; a multi-year low. It increased to 9.9377 early in the morning, and held fairly strongly at the end of the session.
Tuesday, August 5, 2008
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The U.S Dollar posted its best gain in 6 years, partly due to crude’s barreling of $4.82 to $115.20. The U.S Dollar posted a 1.6% rise in the Dollar Index. The Dollar Index measures the dollar’s performance against the 6 major currencies: the Euro, Japanese yen, British pound, Swiss franc, Canadian dollar and Swedish krona. On March 16,2008 the index bottomed to 70.698, yesterday’s close was 75.850. Yesterday’s 1.6% jump may seem small but it is the best gain since 2002. This is a significant improvement that deserves some merit, it indicates that the U.S economy is rebounding as other economies experience some exhaustion. Some countries in the EU, England especially, are experiencing some of the financial woes that we are. This may also foreshadow a decline in interest rates in some of the EU countries.
Crude Oil is at it’s lowest since May 1,2008; this is a good thing. Oil has been on a decline for the past two weeks which is concomitantly lowering the dollar. The dollar has been showing increased fortitude against the Yen, Euro and British Pound for the past two weeks, just as oil has been declining. The British housing market has witnessed its largest monthly decline as foreclosures are becoming as imminent as they are here.
This is a good sign for the USD. Analysts say that bear markets last 5-10 years, the U.S has been in a bear since 2001. This increase in the index signifies that the future for the USD looks bright; well at least brighter than before.
www.bgmv.com
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