The US Dollar King Of The Currency Markets

Frankfurt (May 29)  The U.S. market witnessed a choppy session on Wednesday and ended in negative territory ending their four-day winning streak. The modestly lower close came on the heels of the recent upward trend by the markets. Also, the benchmark 10-year Treasury yields plummeted to their lowest closing level since last summer on Wednesday. Traders seemed reluctant to make any significant moves for much of the session ahead of the major economic data like weekly jobless claims, pending home sales and revised reading on first quarter GDP. Meanwhile, European stocks drifted lower Wednesday after the recent gains on hopes for ECB action in June. Also, in the absence of any drivers in the market, investors held back on the concerns of conflict in Ukraine.

Currency markets saw the US dollar climb to a May high at 80.63 as the US recovery is at full steam ahead and a slew of Federal Reserve speakers have added interest rate increases to their rhetoric. Many are saying that the Fed might start raising rates in mid-2015. The US Dollar Index (DX) gained around 0.3 percent in yesterday’s trading session on the back of rise in risk aversion in market sentiments in later part of the trade which led to increase in demand for the low yielding currency. However, sharp upside in the currency was capped due to estimates of decline in country’s economic growth data during the week. The currency touched an intraday high of 80.63 and closed at 80.62 on Wednesday.