Greenback down on corrective expectations – Industrial report pushes Czech Crown up
Greenback down on corrective expectations – Industrial report pushes Czech Crown up
01-04-2010 15:06
The US Dollar rose more than 5% in December against the Common European Currency as expectations surged that the current rise of the Greenback could be overdone, pushing the Greenback also down against more-profitable currencies. The Czech Crown reached this week’s highest level against Europe’s Single Common Currency due to optimistic industrial data driving speculations that the Czech economy is recovering after the deepest economic slump since communism ended in the Czech Republic.Greenback Dollar
The Greenback rate is still 4% higher than the Euro in December, while it dropped today. In the meantime, future contracts indicate that the Greenback will perform well next year, given the fact that the improvement of the US economy is expected to continue to fuel the Greenback’s high rates. Other higher-return currencies that dropped against the US Dollar in December from the strongest rate this year one month ago, such as the Kiwi Dollar, also erased partly this month’s losses today due to expectations that the Dollar’s upward trend may be excessive.Commodity currencies
It is expected that the Greenback will continue its upward trend next year, although there are doubts if the fundamental factors will continue to provide support for the US Dollar rally. Commodity-linked currencies, such as the Brazilian Real and the South African Rand, could be less damaged than the Eurozone currency while the Greenback gains, as the improvement of the North-American economy could boost demand for commodity goods, creating a positive scenario for commodity currencies.Czech Crown
Industrial production increased in the Czech Republic this Thursday, while it declined for 14 consecutive months, which resulted in expectations that the nation exited the most intense slump in two decades, which could be a sign for policy makers to increase interest rates next year, stimulating the Czech Crown to rise to the strongest rate against the Single Currency in one week.
