US Dollar Index pushes closer to 83 as the European debt crisis sees no end in sight

The US Dollar Index opened another trading session in bullish mode today, pushing closer to 83 as the European debt crisis continues to rattle stock and currency markets with bad news seeing no end in sight for Greece, Spain and Italy’s financial situation.

Latest Dollar Index Rate

The ICE US Dollar Index, which tracks the US dollar against six major world currencies was trading at 82.745 – 13.51 GMT today, from the session open of 82.605.

The US dollar appreciated 2.06 percent last week against the euro currency to $1.2517 per euro in New York after touching $1.2496, the strongest since July 2010. The Dollar Index jumped 1.37 percent to 82.402, its fourth straight weekly rally yesterday.

Dollar Index Closes in on 90

The US Dollar Index has confirmed the bull market trend higher by breaking out to new 52 week highs, and this could just be the start of a huge move higher. Over the past month, the dollar has stealthily pushed higher into important resistance, flooring commodities and hitting stock markets.

With the January 2012 highs around the 82 level out of the way, that level should now act as support on any ensuing falls and another big swing higher, even up to the 90 level could be on the cards.

“We’re seeing many more periods of dollar buying during these uncertain times,” Ken Dickson, an investment director of currencies at Standard Life Investments in Edinburgh, which manages $257 billion, said in a telephone interview.

European Debt Crisis

European stock markets fell again today as Italy failed to meet its maximum target at a debt sale, Spain struggled to bolster its banking system and a Greek poll showed increased support for anti-austerity parties.

The Stoxx Europe 600 Index declined 1.1 percent to 241.72 at 13.25 in London as yields on Italian and Spanish sovereign debt rose. The benchmark measure has tumbled 11 percent from this year’s high on March 16 amid growing concern that Greece will be forced to leave the euro currency union.

“The rising yields at Italy’s bond auction show the nervousness of the market, impacted by the rising probability of a Greek exit as well as increasing pressure from the Spanish banking market,” said Kai Fachinger, who manages about $750 million at SAM Sustainable Asset Management AG in Zurich.

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US Dollar Index pushes closer to 83 as the European debt crisis sees no end in sight