Bets that the American dollar would push higher gained ground on Monday as the US Dollar Index surged after traders piled out of the euro in belief that last week’s EU leaders summit failed to bolster confidence in their ability to stem the sovereign debt crisis.<\/p>\n
US Dollar Index – Rates<\/strong><\/p>\n The ICE US Dollar Index, which tracks the dollar against six major world currencies (including the euro) was at 79.650, from Monday’s close of 79.581.<\/p>\n Trouble With The Euro<\/strong><\/p>\n The euro could be headed for a long slide lower and possibly take stocks and commodities with it.<\/p>\n At its low Monday, the euro was down 1.5 percent at 1.3168. The euro’s decline accompanied a drop in risk assets, with the S&P 500 down more than 2 percent, gold futures down nearly 3 percent and oil prices down 1.6 percent.<\/p>\n Fitch Monday said it did not see a comprehensive solution to the sovereign crisis, and it expects it to continue at varying levels of intensity beyond 2012. It also forecast a significant economic downturn across the euro zone in the near term.<\/p>\n The ECB is “the only truly credible firewall against liquidity and even solvency crisis in Europe,” Fitch said. Moody’s also commented on the summit’s failure to find decisive policy measures to end the crisis and it warned it would review all the EU countries’ ratings.<\/p>\n “Now, it looks like it wasn’t enough for the market. Especially the prospects of anything coming out of the ECB. It looks dimmer and dimmer.” said Mary Nicola, currency strategist with BNP Paribas.<\/p>\n