The USD
The USD headed for a 4th monthly drop against the EUR, its longest stretch since 2004, as America’s return to growth renewed optimism that a global recovery will quicken, aiding demand for higher-yielding assets. The Dollar weakened as much as 1% to $1.4859 per EUR in the biggest intraday drop since September 8th.
The U.S Dollar rose against the EUR in the previous three sessions as evidence of a stalled U.S. economic recovery, including an unexpected decrease in New Home Sales in September reduced demand for riskier assets. The greenback dropped against the EUR for the first time in 5 days, as investors saw data showing the U.S. economy returned to growth in the third quarter. U.S. Gross Domestic Product (GDP) grew at a 3.5% annual rate in the 3rd quarter, after shrinking in the previous four quarters, the U.S. Commerce Department reported.
The solid Gross Domestic Product reading renewed optimism about a global economic recovery, prompting traders to buy higher-yielding currencies, eroding the greenback’s safe-haven allure. The U.S Dollar will be under heavy pressure on Friday, as investors may continue selling-off the USD on Thursday’s optimistic news. Traders are advised to follow key U.S. releases later today, such as the Chicago PMI and Revised UoM Consumer Sentiment report. These publications will be crucial in determining the USD’s key crosses today.
