Dollar Rallies on ECB Interest Rate Statements
May 5th, 2011Warning: This is not a recommendation to buy, sell or hold any financial instrument.
I don’t know how to tell the difference between a sucker bounce before an index heads lower and a double bottom that touches off a rally. We are definitely in the zone where a strong rally could get started on the DX. The 20 day EMA, however, is intact as I write this, so this could just be noise and short covering.
In other news: Treasury Suggests $2 Trillion Debt Cap Raise.
Via: Reuters:
The euro headed for its biggest slide against the dollar since November on Thursday after the European Central Bank hinted interest rates were unlikely to rise next month, short-circuiting a rally that had driven the currency to a 17-month high.
The signal by ECB President Jean-Claude Trichet on rates added to a growing sense of risk aversion in markets, sparked by signs of slower growth in the United States and some other developed economies, and spurred traders to bail out of high-yielding currencies and commodities.
The dollar and yen were the main beneficiaries, as record low interest rates made it profitable to borrow in those two currencies at no cost to finance more lucrative investments.
