U.S. Dollar Gains on Global Political Uncertainty
Currencies / US Dollar Feb 12, 2011 - 09:32 AM GMTBy: LiveCharts
It is a amazing that despite some improving signs on the domestic economy, it is developments in Egypt that have helped prop up the dollar in early Friday (February 11) currency trade.
Egyptian President Hosni Mubarak has once again refused demands that he step down in lieu of a political uprising in the country. The uncertainty surrounding developments in Egypt have weighed on global equities, but the greenback has made a slight comeback.
In times of global uncertainty, the dollar is sometimes selected as a source of refuge for investors and other countries looking to preserve financial resources.
After weeks of declines against most major currencies, the dollar is finishing this week strong against major counterparts, including the European currencies and the Japanese yen.
One dollar currently nets 83.468 yen. The greenback continues to show resistance to the yen at every attempt to push closer to the huge psychological barrier of 80 yen. At some point, traders may find it easier to push higher.
The euro is currently worth $1.35296. The euro has dropped three pips in less than two weeks from its near-term high.
The pair has also slipped below key medium-term support just below $1.36 and may be headed for a swift drop to $1.29 if a quick move higher does not develop during the next few days of trading.
Another contributor to the fall in the euro-dollar is the dip in oil prices this week. Though up $.53 in early Friday morning trade on the New York NYMEX, light sweet crude futures are still down around $5 from last week.
One barrel of light sweet crude futures is trading at just $87.26 in early Friday trade.
The British pound has also slipped back below the $1.60 level and is currently netting $1.59937. The pound recently moved close to $1.63, but has struggled mightily in efforts to take firm hold above $1.60.
Despite improvements in the dollar’s position to close the week, the jury is still out on long-term propositions for dollar movement in 2011. Developments in housing and jobs, along with the Fed’s position on interest rates will affect the bigger picture.
Neil Kokemuller
Neil Kokemuller is an Associate Professor of Marketing at Des Moines Area Community College in Des Moines, Iowa, USA. He has a MBA from Iowa State University. He is also in house stock market commentator at Live Charts UK, where you can find real time charts and share prices .
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