A recent bounce higher for the US Dollar Index may have investors wondering just how strong and reliable is the rebound in the dollar index whilst more QE and budget cuts remain in the spotlight for the United States.
US Dollar Index Latest Rates
The Dollar Index, which measures the performance of the US dollar against a basket of major world currencies was at 80.167, 06:35 GMT today. The US dollar was little changed against major currencies this morning as investors stayed cautious ahead of the G20 summit.
The strength or weakness of the US dollar is currently influenced by two features. The first feature is the continuation of QE (quantitative easing) in the US, which should lead to weakness in the dollar. The second feature is the looming showdown on budgets and automatic spending cuts, known as the sequester, which kicks in on 1st March in the US. This uncertainty may help weaken the US dollar against other major currencies.
G20 Summit – Currency Wars
Finance ministers and central bankers from the G20 countries will gather in Moscow for a two day meeting from 15th February where the subject of “currency wars” will be on the agenda.
Not many are expecting a strong line from the G20, largely because on the question of currencies the group divides into distinct camps.
Developing countries are expected to voice objections to the monetary easing that has put downward pressure on currencies such as the US dollar and UK sterling, whilst well off countries will probably respond by repeating long held gripes about the undervalued currencies of Asian exporters.
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This article was written by: JR @ liveoilprices.co.uk
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Originally posted here:
US Dollar Index shows some strength bouncing on a one month high
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