The USD moved slighly in an upward trend during Monday trading, pulling back part of the recent losses. Following the positive US Non-Farm Payroll report on Friday there appears to be a stronger sentiment in the US for a move towards improving econonmy for the coming months.
A general measure of USD performance is the Dollar-Index (DXY) which increased by 0.35%. The DXY is a market measure of the USD against a basket of six major currencies.
Leading market analysts and Credit Agricole on friday were quoted as “The fact that encouraging data releases will not alter the Federal Reserve’s dovish stance implies U.S. bond yields will remain compressed, giving no support for the U.S. dollar from higher U.S. yields for some time yet,”. As a result, on Friday trading the USD did edge down slightly.
However, accross the atlantic, European fears continue to maintain the USD at a reasonable level. The chaos surrounding the Greek financial reform continues to dominate the news and cause negative impact on the value of the dollar.
In Greece, news that current Prime Minister Lucas Papademos has threatened to quit if his three close political parties and partners to the economic reform do not back the current discussions and proposals. Local news channels in Greece reported the three party heads are due to meet with Papademos over the weekend and will continue into the start of the week for crunch talks with Papademos aiming this week to tie up long awaited and finalize plans with the IMF and EU on it’s second bailout package.
One of the current stumbling blocks for concluding the bailout package discussions is the unity of Greek political leaders to accept the reforms presented by the European Central Banks and the IMF. Without this co-ordinated domestic approval, the EU and IMF will not ratify their side of the agreeement.
In trading, the EURUSD fell -0.19% at the end of the week, trading at $1.3089, down from an earlier price of $1.3147.
