For those of you that follow the forex market, it is very apparent that the U.S. dollar has been one of the weakest currencies until today. Traders have sold off the U.S. currency after a series of gains in U.S. stocks and a string of positive economic data. It is important to note that traders often sell the greenback when there is a lot of optimism in the forex market. However, this seems to have come to a halt this morning.
There is a string feeling among forex traders that the U.S. dollar is somewhat. It has made some big losses versus the pound and the euro in recent trading days. This has been possible as the U.K. published economic figures which came out better than was originally expected. The euro has been able to gain ground versus the greenback, even though there are many risks associated with the Eurozone at the moment.
The EUR/USD pair has slumped today by 0.26% to $1.3064. The GBP/USD is lower by 0.09% at $1.5488. The dollar has also made impressive gains versus a number of its other peers in the most recent trading.
What investors are trying to wonder at the moment is the gains the USD making today a short-term phenomenon? A lot of factors will be determining this such as economic data published from the leading economies. In addition, if the Fed does decided to go ahead with economic stimulus at the end of its two-day meeting, then this could drive the dollar a lot lower versus its peers.