The USD Soars
The USD made impressive gains throughout Monday’s trading. This process was sustained, as concerns of investors rose on fears that U.S. lawmakers will make big cutbacks on tax credits for new homebuyers. If this does actually occur, then Bank of America will need to pay back its government debt by selling a large amount of its shares. As the day went by, the USD eventually recovered from the recent 14-month low vs. the EUR, as the leading U.S. equity indices, such as the S&P declined. This led to further demand for the USD on Monday, especially as Gold tumbled significantly yesterday.
The EUR/USD cross declined by a massive 190 pips to the 1.48.50 level. It is important to take into account that this behavior is set to shock the market for the rest of the current month of October. The GBP/USD pair was virtually unchanged, as it closed at the 1.6290 level. This was due in part to the GBP’s great strength throughout yesterday’s trading. The USD also made some very impressive gains vs. the JPY, CHF and Canadian Dollar. All of this remarkable behavior may tilt the top U.S. and global banks into labeling the U.S. Dollar as a safe-haven currency once again.
Looking ahead to today’s trading, there is set to be some very important economic news that is scheduled to be released from the U.S. The most important of these are the S&P/CS Composite-20 HPI at 13:00 GMT, the CB Consumer Confidence figures at 14:00 GMT and the very important speech by U.S. Treasury Secretary Timothy Geithner at 20:00 GMT. The latter of these 2 events is set to be the main driving force behind the USD’s strength today. You should also follow other releases form the leading industrialized economies, as the trading day unfolds.
