Beating a dead horse

With so much news focused on the US Dollar, it’s hard to not sound like a broken record. The US Dollar has been used as a benchmark currency since World War II, in a decision to try and help the war-torn countries stabilize in the world economy. In recent years the Dollar has been beaten back, and reserves all over the world have been shifting a section of their stash away from the US Dollar. While this has caused alarm for the patriots, it has made for sound practice worldwide. The concept of not holding all your eggs in one basket has been taken to heart, as reserves diversify with other major currencies like the Euro and Yen. In recent months, the US Dollar has been laboring under the stresses of both the domestic economy and pressure mounting from international policy makers. This has increased the bearish tone on the Dollar stemming from weak US reports. While this may be an overly simplistic view of the US economy, recent news events have pulled the benchmark down to a new 2007 low against the Euro. The latest news to take its toll on the Greenback was Wednesday’s Fed announcement. Although the actual reading was well in line with expectations, the comments afterward were more bearish than expected. The bias for a tightening USD has fallen away, and the Fed may look to reverse its position and loosen rates in the near future. Currently, the EUR/USD is trading at 1.3333 as we head into the Asian sessions.

David Hilgeman, XPRESSTRADE Analyst