The US Dollar has soared to a six-month high as investors seek shelter in the safe haven currency. Weak economic data out of the Eurozone and the UK has seen the Dollar surge against those struggling currencies.
Investors have turned their back on the Euro as European manufacturing appeared to be no closer to showing signs of recovery and as China, one of Europe’s key trading partners posted a slowdown in growth. Against the Pound the Dollar has hit its highest level since June 2010 after the UK saw a shock contraction in its manufacturing sector, raising fears that the nation is heading for a triple dip recession.
The Dollar’s rise is showing how investors are backing the world’s biggest economy to ride out the effects of the spending cuts due to hit it today. A rise in US consumer confidence and an improving outlook for employment and new home sales has caused traders to believe that the Dollar will be the safest option.
“The Dollar index is flying high on improving growth differential prospects … while at the same time investors remain concerned that fiscal uncertainty has the potential to weigh on the economy,” said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co in New York.
President Obama is due to meet Congressional leaders in a bid to avoid the unprecedented, across-the-board cuts totalling $85 billion (56 billion pounds).
“When you look across Europe, you see high unemployment, barely any growth, apart from Germany, and rising debt levels,” said Howard Jones, advisor at money managers RMG Wealth Management. “What Europe needs is growth, easier monetary conditions and a weaker currency. The U.S. data in comparison is much better than Europe and to us, the Dollar is a buy. We expect the Euro to ease towards the mid $1.20s in the next two months.”
Current US Dollar Exchange Rates
The US Dollar to Euro (USD/EUR) exchange rate is trading at 0.7701
The US Dollar to Pound Sterling (USD/GBP) exchange rate is trading at 0.666
The US Dollar to Canadian Dollar (USD/CAD) exchange rate is trading at 1.0295
The US Dollar to Australian Dollar (USD/AUD) exchange rate is trading at 0.9799
The US Dollar to New Zealand Dollar (USD/NZD) exchange rate is trading at 1.2127
The US Dollar to Japanese Yen (USD/JPY) exchange rate is trading at 93.0508
These exchange rates were correct as of 15:20 pm GMT
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