The US dollar gained versus all the major currencies especially against the Euro and the Japanese Yen on latest US economic data. According to the latest government report the consumer prices in United States increased by 0.1 percent in the last month whereas the as per report of US Federal Reserve the 0.4% increase in industrial production also surpassed economists’ expectations.
The US central bank hasn’t changed its interest rate for now; further $600 billion bond purchase program also remains unchanged as the US economy seems to be improving.
Director currency research Kathy Lien from GFT commented, “Stronger-than-expected consumer spending and the lack of any major surprises from the Federal Reserve have helped the dollar recover against the Japanese yen and European currencies.”
The dollar index DXY which measures the US dollar movement versus its six major rivals increased to 80.01 on Wednesday as compared to 79.25 on Tuesday.
The Euro declined to 1.3255 versus the US dollar as compared to $1.3411 on late Tuesday’s trading session. The Euro remained under selling pressure on the news of possible downgrading of Standard & Poor’s credit rating of Aa1 for Spain.
The greenback also advanced against the Japanese Yen to 84.04 as compared to 83.64 on late Tuesday’s session.
Kathy Lien further added that bullish rally of the US dollar was modest considering the breadth of latest good news. Many believe that US Federal Reserve would begin a new bond buying program in reaction to which foreign investors bought US long term assets worth of $27.6 billion in October which is very low as compared to prior months.
According to Lien investors are still worried due to bipartisan tax-and spending package which has to be presented before Congress.
