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Dollar Bulls Resurface as Russia Makes Nice
Two overnight events sent the U.S. Dollar sharply higher on Monday. Firstly, the Group of Eight finance ministers hinted at an economic stimulus exit strategy and the Russians expressed confidence in the U.S. Dollar.
The Group of Eight finance ministers signaling an end to the economic stimulus plans was eventually going to happen. Signs of an economic recovery have been building for a couple of months. The ministers haven’t decided anything concrete at this time. This news is expected to serve as a message to others that exit strategies are being considered. They feel it is much better to announce an orderly exit rather than act haphazardly.
Russian Finance Minister Alexei Kudrin expressed confidence in the U.S. Dollar last night. This came after Russia and China had questioned the U.S. Dollar as the world’s currency. These comments reassured investors that it is too early to think of the Dollar as dead.
Forex traders responded to these news events by jumping into the Dollar. This put downside pressure on all of the currencies.
Tags:forex
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