Range-trading Mixed Dollar vs. Rivals

The US Dollar struggled on Monday’s sessions spending a tight range-trading against major competitors at the financial market getting a boost against the Euro but failing against the Yen.

The Dollar’s positive performance versus the Euro was catalyzed by the weakening prices of world crude oil.  It never overcame the Japanese Yen however due to the gloomy outlook at Wall Street.

Currency strategists predicted more range trading and consolidation in the coming sessions but the US Dollar is also expected to regain its strength to continue its upswing trend.  

Recent ranges are considerably evident with the Euro which changed hands at $1.4752.  Friday saw the Euro at $1.4788.  The Euro / Dollar exchange rates continue to be within range of $1.4650 to $1.4910 since mid-August.  The big breakout experienced in mid-July did not happen again, leading strategists to believe that the currency pair has entered a new range trading.

October crude oil deliveries closed at $115.11 per barrel up by 52 cents on the New York Mercantile Exchange.  The move can trigger an inverse influence over the Dollar as world oil is priced in US dollars.  Meanwhile, the three major indexes at Wall Street all ended up in solid red as the increase in risk aversion provided a windfall for the Yen and Franc.

Friday’s trading saw the Dollar buying 1.0985 Swiss Francs to 1.0960 Francs at the current trades.  The buck is also lower versus the Japanese Yen as it bought 109.24 yen today compared to Friday’s trading of 110.08 yen.

The Dollar rode strongly on figures showing that re-sale of homes in the US rose in July but record high inventory levels also increased.  Data showed that a 3.1% increase in re-sale of homes was recorded in July reflecting the adjusted 5 million annual rates, the highest ever reached in a five-month period.  The figures are much stronger compared to the 4.91 million pace projected by economists.

British Pound Sterling

The British Pound Sterling slightly clipped its losses versus the greenback after registering an all time low at the floors in more than two years.  The Pound changed hands at $1.8520 improving from Friday’s trading at $1.8523.

The hapless Pound was severely pounded at the end of last week as updated data showed that the economy of the Kingdom is grinding to a halt at the second quarter.  The looming recession ended the 64-quarter run of consecutive economic growth.

The Dollar’s rally was cushioned primarily by Fed Chairman Ben Bernanke’s speech of August 22.  Mr. Bernanke focused his attention on defining monetary policies before an international audience at Wyoming.  Strategists of Commerzbank said that that Fed’s firm stand on keeping the current US interest rates contributed significantly to the good performance of the Dollar.