US Dollar Index remains strong as Euro debt concerns persist

6 October 2011 6 October 2011

SondraHunter

The euro remains weak against the US dollar, helping the ICE Dollar Index to remain near 80 after speculation a slowing EU economy may prompt the ECB to cut benchmark interest rates at a meeting later today.

Dollar Index – Latest Rates

The ICE US Dollar Index, which tracks the US dollar against six major world currencies was little changed at 79.315 from yesterday’s close of 79.385.

The Dollar Index rose after US Fed Chairman Ben Bernanke signaled willingness to step up measures to spur US growth.

Meanwhile, the euro also fell against other currencies yesterday as Moody’s said European countries with debt ratings below the top Aaa level may see their creditworthiness reduced.

To add to the strength in the US dollar, the ECB may well look to cut eurozone benchmark interest rates in their monthly meeting later today.

“We’re seeing the market go back to its default euro bearishness. The market is focusing on the possibility of rate cuts. There’s enough angst circulating in the eurozone for people to think there might be a 25 basis point cut.” said Elizabeth Gregory, a market strategist in Geneva at Swissquote Bank SA.

A stronger US dollar helps push back high commodity prices, of which oil and gold are the main stars of the market.

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