The US Dollar jumped to a seven-week high against a number of its most traded peers after an Israeli missile launch sparked renewed concern over tensions in the Middle East bolstering demand for the safe haven ‘Greenback’.
Concerns grew after Russian radar detected two launches of ballistic objects in the Eastern Mediterranean, a region that has seen escalating tension following threats by the USA that it would launch military action against Syria’s Assad regime.
Tensions had eased slightly after US President Barrack Obama announced that he would put any decision for military action to a Congressional vote. Congress is set to begin its hearings on the case for intervention, with Obama seeking to persuade sceptical politicians and the American people of the need for a military response to the suspected chemical weapons attack on the outskirts of Damascus on the 21st August.
If a strike does go ahead there are concerns that the wider region could be dragged into a conflict. Russia and Iran had thrown in their support with Assad whilst the UK, France and USA are opposed. The UK voted against military intervention earlier in the week.
The currency also found support from increasing speculation that the Federal Reserve could begin to taper its monetary easing programme at its policy meeting next week.
“Dollar strength is definitely a combination of concerns over Syria and expectations of tapering,” Christian Lawrence, a foreign-exchange strategist at Rabobank International in London, said in a telephone interview with Bloomberg news. “We’re still structurally bullish on the dollar on the back of QE tapering.”
Also supporting the Dollar was the release of more positive economic data. Construction spending in the country rose to its highest level in four years in July and both the Markit and ISM manufacturing PMI’s came in strongly.
According to the ISM manufacturing climbed to 55.7, up from the prior months reading of 55.4 suggesting that the US is benefitting from the improving picture in Europe and China.
Current US Dollar (USD) Exchange Rates
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6419
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7590
The US Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.1080
The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 99.6271
The US Dollar/Canadian Dollar Exchange Rate is currently in the region of: 1.0540
(Correct as of 15:30 pm GMT)
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