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The euro strengthened slightly against dollar
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The euro strengthened slightly against dollar on Tuesday in trading in the international foreign currencies markets, but it has been still holding near the lowest level in three months, because of the support dollar has from the market participants who expect the increase of interest rates in the USA. The euro has strengthened against US currency until noon for 0.2% on 1.0853 USD and thus remained in the middle of range in which it has been moving since the end of the last week and had the lowest level in the past three months.
The dollar’s index which measures the value of US currency against six leading world currencies, reached the new highest level within three months of 98.151 points. The dollar was traded at 124,30 yens meaning that dollar has more or less stayed unchanged in comparison to the previous closure, after it, earlier at one moment, reached the highest level in five weeks of 124.48 yens.
The dollar ‘gets a second wind’ by each statement concerning the increase of interest rates in the USA, and the latest one which stands out refers to Fed Bank. Namely, James Bullard, the branch president of the US Fed Reserve Bank in St. Louis, stated yesterday that Fed is likely to increase interest rates in September. This is the reason of today’s rise of the dollar to the new highest level against yen within five weeks and to the highest level within three months against currency basket.
The U.S. currency continues with its growth and it bounced from the low 120 yens, where it was at the beginning of the month, when investors , due to the uncertainties regarding Greece and severe fall in prices of shares in the Chinese market, found a shelter in Japanese currency. However, analysts think that it might not be easy for dollar to break the level of 125 yens.
Speaking about important currency movements, British pound stands out and also has the benefits from the recent increase of interest rates in Great Britain, so it strengthened this morning against euro and dollar for 1%.