Wednesday, August 5, 2009

Bullish Stock Market Sentiment Brings Dollar Decline

The US Dollar ended up yesterday`s trades at the lowest level for this year against the Euro. This decline was caused by decline in US equities and pessimistic services sector figures. The greenback also slid 0.2 percent versus the JPY reaching the level of 95.02 from Tuesday`s mark of 95.25.

The broad decline of the Dollar is spurred by rally of high yielding assets such as shares and commodities. As economists and experts of technical analysis stated the Dollar's inverse relationship with trader appetite for risky assets has reasserted itself in last weeks. The USD has also lost its position as equities started a strong global rally and investors rushed into assets perceived as higher yielding ones.

Optimistic figures from China and the US boosted investors to sell Dollars choosing for trade risky assets making it complicated for the Dollar to rally a lot.

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