Currency News: A More Moderate Dollar Bull View
Currency News
The strong dollar value is perceived as the consequence of the sign of a strong US economy. The dollar achieved a two straight weekly gain before the Greek vote. This week, 13 of the 16 dollars peers have been strengthened.
The dollar value increased while unemployment rate reached a 7-year low and the economic activity has been improving moderately. Why a dynamic US economy leads to a strongest dollar? If the economy is going better, then the Fed will increase its interest rate. Investors would have more interest in US assets because of the higher borrowing rate and so on the demand for dollars will surge. US currency rose 0.6% versus the euro to $1.1112 because of the Greece uncertainty. Investors have more confidence in US assets rather than European ones.
Nevertheless, the dollar climb is going to slow. On Friday, the dollar versus euro rate felt 0.3% because of a disappointing report about American economy. Only 223 000 jobs have been created on June whereas we expected 233 000 jobs creation. Also, the average hourly earnings rose 2% from a year ago compared with a 2.3% analyst estimate. The results are not as good as expert’s anticipations and so the rise of the FED interest rate is likely to be postponed.
