The dollar strengthened against the euro for the 3rd week in a row and rose against the majority of its major counterparts as concern grew over the ongoing Egyptian unrest and the debt crisis in Europe.
Investors sought the relative safety of the dollar as speculation increased over Portugal’s funding costs rising to an unsustainable level along with Egyptian President Hosni Mubarak stepping aside and handing power over to the military. Investors were further encouraged to seek out greenbacks with positive U.S.jobs data recently released along with a forecast increase in January retail sales.
Joe Manimbo, an analyst with Travelex Global Business Payments said, “The dollar’s rally was built on safe-haven flows amid unrest in Egypt and renewed concern about Europe’s sovereign debt crisis.The other factor that really supported the dollar was positive U.S. data.”
The dollar climbed 0.2% to $1.3554 per euro and advanced against the yen 1.5% to 83.43, the most in 5 weeks. Alan Ruskin, head of 10 foreign exchange strategy at Deutsche Bank AG in New York said, “All of the usual things are overhanging the euro from a sovereign-risk standpoint — it’s not as if anything has moved in a euro-positive direction.”
In addition, Jens Nordvig the managing director of currency research at Nomura in New York said, “The reason we’re seeing a decent-sized move like this is because the outlook in the U.S. is better.”
Source: http://newsdailybrief.com
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