By: Barbara Zigah The U.S. Dollar Index slipped to a new 16-month low in Asian trading today as investor speculation that the U.S. Federal Reserve Bank might alter its currently loose monetary policy grows more remote. The U.S. Dollar Index, which gauges the greenback’s strength versus a weighted basket of major currencies slipped to 74.676 .DXY, a year to date loss of nearly 5%. Yesterday’s publication of the Federal Reserve Beige Book essentially confirmed the Fed’s view on inflation as temporary, with little to no likelihood that QE3 was in the making.
The common currency Euro, on the other hand, is approaching highs against the U.S. Dollar, as investors speculate that the ECB will continue to tighten monetary policy following the recently implemented interest rate hike. As reported at 2:58 p.m. (JST) in Tokyo, the Euro gained nearly 0.5% to trade at $1.4508, close to the 15-month peak of $1.4521. The U.S. Dollar also fell lower against the Japanese Yen, trading at one point at 83.20 Yen on the EBS trading platform, and well off the 6½ month peak of 85.55 Yen struck last week. One FX strategist in London pointed out that the U.S. Dollar has no new factors on which to rise, since it appears obvious that the Federal Reserve is not going to change its current stance anytime soon, given lingering high unemployment.
http://www.dailyforex.com/forex-news/2011/04/U.S.-Dollar-Index-Strikes-16-Month-Trough-in-Asia/7684
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