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Dollar Rises While Traders Afraid of Recession

August 18, 2011 at 21:37 by Vladimir Vyun

US DollarThe US dollar went up today versus most of its major peers as the speculation that the global economy will face a double-dip recession made investors stick to safe currencies. The greenback is still considered to be a safe currency even with all the turmoil in the United States.

This day was rich on the macroeconomic reports from the US, but the data has left a mixed feeling about the largest North American economy. On the positive note, both the Consumer Price Index and the leading indicators advanced 0.5 percent in July. But there wasn’t lack of negative reports. Claims from unemployment benefits increased to 408,000 last week from 399,000 in the week before. Existing home sales fell 3.5 percent to a seasonally adjusted annual rate of 4.67 million in July from 4.84 million in June. Manufacturing, that previously was one of the strongest sectors in the American economy, slowed and slowed sharply, as was shown by the Federal Reserve Bank of Philadelphia Manufacturing Index that posted a whooping drop from 3.2 in July to -30.7 in August.

The greenback posted gains against such currencies as the pound and the euro, though it currently shows the tendency for weakening. The dollar went sideways against the yen.

EUR/USD dropped from 1.4424 to 1.4325 today as of 21:37 GMT, while the intraday low was 1.4270. GBP/USD rebounded to 1.6512 after dropping from 1.6542 to as low as 1.6420. USD/JPY traded at 76.52 after opening at 76.60.

If you have any questions, comments, or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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