Dollar Bullish Trends Gain Momentum

The dollar ended this week with the highest rate versus the European common currency after positive reports in the U.S. suggested that the North American economy�s pace of recovery is accelerating, attracting investors to dollar priced assets. After a report indicating better than expected figures for retail sales and an increase in consumer sentiment were published in the United States, the dollar gained versus most of the 16 main traded currencies reverting a losing streak this week that set it to the lowest level in 2009 in the beginning of December. The New Zealand dollar was one of the very few currencies that found support to gain versus the greenback as the South Pacific nation is likely to start a series of interest rates hikes as suggested by the Reserve Bank of New Zealand, which would be following its neighboring Australia, the first wealthy nation to raise borrowing costs after the global slump. A part of analysts affirm that the dollar bearish days are over, as positive reports are likely to continue to be published which will lead the Federal Reserve to raise borrowing costs sooner than previously expected, causing a massive capital inflow to the U.S. and recovering the greenback�s attractiveness in foreign-exchange markets. EUR/USD closed the week at 1.4611 as of 15:43 GMT from a previous rate of 1.4733 on Thursday. GBP/USD traded at 1.6260 from

Euro Suffers as Dubai Situation Worsens

The single European currency approached the yesterday�s minimums against the U.S. dollar and the other major currencies today as the bad news on the Dubai�s troubled debt worsened the global financial outlooks. The demand for the high-yielding assets, including the riskier currencies (such as the euro), decreased after the Financial Times reported that the creditors of one of the Dubai World�s branches are adding pressure on the debtor. The report of the decreased industrial production in France in October has also spurred euro�s decline. Month-over-month the industrial production declined by 0.8 percent in France, while a growth by 1.6 percent was expected by the market participants. Any disappointment in the fast economic recovery is going to hurt the euro. The currency also decreased to the lowest level against the Australian dollar since November 18, as the employment increased 6 times faster than expected in Australia. But despite the other fundamental factors, the currency analysts mention Dubai situation as one of the main reasons for the current euro�s drop, which runs since December 4. Carry trades are at risk and they are mostly based on selling the dollar and the yen and buying the euro. EUR/USD went down from 1.4738 to 1.4711 after reaching as low as 1.4685 today. EUR/JPY gained slightly � from 129.68 to 129.73, while EUR/AUD decreased from 1.6194 to 1.6078 or 0.7 percent.