The dollar index has fallen significantly over the course of
the week. This bearish attitude toward the Dollar throughout the week was a
result of the Wednesday FOMC meeting in which the members of the Federal Reserve
board expressed concern about low levels of inflation. This led to speculation
that interest rates will remain low for longer. The Pound, Euro and Yen stood
to benefit near the end of this week, as alternative safe-haven currencies, and
have increased in value in the last 24-hours as investors have shied away from
buying the dollar.
The Euro has improved against its major counterparts as a
positive ECB monthly bulletin combined with Greece selling over $4 billion
worth of bonds to eager investors on Thursday. The high-demand for Greek bonds
on Thursday drew attention to how much those markets have recovered since the
days of the Eurozone crisis. With these facts fresh in the minds of investors,
the Euro has received a recent bump higher, but these gains may be limited as
we currently forecast Dollar and Sterling strength in 2014.
Nicholas Ebisch
Corporate Account Manager
Caxton FX
