The US dollar recovered ground against the euro yesterday, recovering almost 2 cents as investors bought back into the safe haven currency as recent risk appetite faded somewhat. North American equity markets finished lower yesterday evening, a day after a big rally that was driven partly by news of the US plan to help rid banks of toxic assets. As optimism about that plan faded yesterday the US dollar rose as its safe-haven appeal increased.
Also, the euro was undermined as traders shifted their focus to a change of tone from European Central Bank members that suggested impending economic measures from the eurozone. Both ECB President Jean-Claude Trichet and governing council member Axel Weber said eurozone rates aren't at their bottom. The European Central Bank has not announced quantitative easing plans as of yet, but some analysts are now predicting that a rate cut at the ECB’s next meeting on 2nd April may be combined with news of quantitative easing.
In Germany, IFO Expectations are due to be released this morning at 09.00 GMT. In the US, there are several significant announcements taking place today including MBA Mortgage Applications, Durable Goods Orders and New Home Sales.
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