Dollar takes brunt of Washington debt deal battle

[Ghost Dog]

Source: Financial Times

Tuesday 10.00 BST. At first glance, it looks like the market has become bored with the US debt ceiling game of chicken, with hopes for a busy and positive week of corporate earnings from global companies helping to stabilise equity benchmarks and support commodities.

...

But action in the forex space perhaps suggests the dollar is starting to feel the weight of investors’ chagrin at Washington’s inability to conclude the tortuous budget negotiations as the August 2 deadline approaches.

The greenback is down 0.7 per cent on a trade-weighted basis to 73.62 and is struggling against most major crosses, losing 0.8 per cent to $1.4489 versus the euro and at SFr0.8025 is threatening to fall below SFr0.80 for the first time.

The febrile nature of the currency sector was illustrated by action in dollar/yen. In early Asian trading, the buck suddenly jumped by almost a full yen to as high as Y78.75 after earlier brushing a four-month low of Y77.88.





Read more: http://www.ft.com/intl/cms/s/0/fcb40bda-b66b-11e0-8bed-00144feabdc0.html#axzz1T8th8mbE

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Pound Climbs To Fresh 6-week High Against Dollar

BRUSSELS (dpa-AFX) - The pound climbed to a fresh 6-week high against the dollar in early European deals on Tuesday despite a report showed the U.K. economy expanded at a slower pace as estimated for the second quarter.

...

The pound jumped to a fresh 6-week high of 1.6415 against the dollar at 4:35 am ET. The next upside target level for the U.K. currency is seen at 1.645. The pound-dollar pair is now worth 1.6400, compared to 1.6278 hit late New York Monday.

/... http://www.finanznachrichten.de/nachrichten-2011-07/20890743-pound-climbs-to-fresh-6-week-high-against-dollar-020.htm

Euro Surges Up To 15-day High Against Pound

BRUSSELS (dpa-AFX) - The euro strengthened against the pound in Asian deals on Tuesday. The pair that closed yesterday's trading at 0.8836 against the pound is now worth 0.8873. This set the highest level for the euro since July 11. If the euro advances further, 0.890 is seen as the next target level.

http://www.finanznachrichten.de/nachrichten-2011-07/20888513-euro-surges-up-to-15-day-high-against-pound-020.htm

Greenback Drops To 5-day Low Against Canadian Dollar

OTTAWA (dpa-AFX) - The US dollar fell to a 5-day low of 0.9428 against its Canadian counterpart in early European trading on Tuesday. The greenback-loonie pair is presently worth 0.9429 and a move below the 0.9426 level could set its weakest mark since November 2007. The pair settled Monday's deals at 0.9474.

/.. http://www.finanznachrichten.de/nachrichten-2011-07/20889997-greenback-drops-to-5-day-low-against-canadian-dollar-020.htm

Yuan Climbs To Fresh Record High Against Dollar On Record Fixing Rate

PEKING (dpa-AFX) - In Asian deals on Tuesday, the Chinese yuan strengthened to a fresh record high against the U.S. dollar on central bank's record high parity rate fixing.

The People's Bank of China set today's central parity rate for the yuan at a record high of 6.4470 per dollar, compared to Monday's daily reference rate of 6.4503.

The yuan is allowed to strengthen or weaken 0.5 percent from the central parity rate each day in China's foreign exchange spot market.

/... http://www.finanznachrichten.de/nachrichten-2011-07/20887810-yuan-climbs-to-fresh-record-high-against-dollar-on-record-fixing-rate-020.htm

US Dollar Index over last 10 years

The US Dollar Index (USDX) is an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies.

It is a weighted geometric mean of the dollar's value compared only with

Euro (EUR), 58.6% weight
Japanese Yen (JPY) 12.6% weight
Pound sterling (GBP), 11.9% weight
Canadian dollar (CAD), 9.1% weight
Swedish krona (SEK), 4.2% weight and
Swiss franc (CHF) 3.6% weight

USDX goes up when the US dollar gains "strength" (value) when compared to other currencies.

USDX started in March 1973, soon after the dismantling of the Bretton Woods system. At its start, the value of the US Dollar Index was 100.000. It has since traded as high as 148.1244 in February 1985, and as low as 70.698 on March 16, 2008, the lowest since its inception in 1973.

...

USDX can be traded as a futures contract on the IntercontinentalExchange (ICE). It is also available in exchange traded funds (ETFs), options and mutual funds.

/... http://en.wikipedia.org/wiki/U.S._Dollar_Index

[hamerfan]

1. That's an eye-opening chart...

Thanks, Ghost Dog!

[BlueMTexpat]

2. I have personally seen the USD fall below 80 cents against the CHF

in the past week. Because my pension and SS are USD-based and then converted into CHF (the CHF is at an all-time high against both the USD and the EUR), I have already seen a real and significant cut in my retirement benefits.

Screw Cantor, all Rethugs and complicit Dems who have brought us all to this pass! A pox on them all!

Corporatism uber alles is the theme, for sure. Especially since the 1980s, we have moved from the world's once most admired democracy backwards to the feudal Middle Ages - and it's happening so fast.

[Ghost Dog]

3. Yes. I've always considered CHF to be stable, with other fiat currencies weakening.

But now I see many Swiss people getting worried, again, about CHF strength (reduces competitiveness for important Swiss exports and overseas earnings). Nobody seems to know whether the SNB (Swiss National Bank) can do anything to mitigate the situation...

... Your seeing a rate below 0.80 might be due to commissions charged on your transaction, whether explicitly stated or not.

[BlueMTexpat]

8. It's possible perhaps, but the x rate they were stating was .79 and some other digits

in the printed receipt.

It's literally unbelievable whatever it is. And you are right about a certain level of concern among the Swiss about the strength of the CHF. The decision - at least the most recent one that I am aware of - is to do nothing. At least for the moment.

The only solution for me to make ends meet is to return to the workplace for a time, at least on a part-time basis. Fortunately, I have good choices here. The skills I have that are considered valuable where I live here do not seem to be valued in the US and I would just be another-out-of-work senior there lining up for a job at McDonalds - if any jobs are left there.

What a sad pass America has come to since the Reagan years and the rise of the corporatists. I remember in the 1960s when I first went to work abroad how we were looked to primarily as THE shining example of hope. Now we are considered the example NOT to follow. If we could only see ourselves as others do.

[Ghost Dog]

11. Switzerland does appear to me to be a relatively healthy society, still

(well, the part I know best is the French-speaking south (edit: ah! same as you!)), where people of all ages are generally respected as human beings and can find honest work - including most immigrants, although I'm aware that there is some racial/religious bigotry which I and I think most Swiss people hope can be, um, sublimated in a dignified manner.

I wish you all the best making ends meet there.

The SNB got rather burned, last year, trying to stem the tide, so we all understand the 'do nothing' stance, for now.

Indeed, what a sad pass for USA, and for UK too, to have come to what we are seeing in their cases.

Solidarity.

[neoralme]

7. We need some folks who'll take to the streets and do not nice

things. If we don't do that, they will destroy us. They know that our main weapons of attack are garish signs and emails to politicans while the other side plans and implements. By next election they will have a way to control all the votes, so it won't matter how much people don't like Republicans. You can circle the wagons for only so long.

[Ghost Dog]

4. Canadian Dollar Climbs To New Multi-year High Against Greenback

OTTAWA (dpa-AFX) - The Canadian dollar touched 0.9414 against the US dollar around 7:45 am ET Tuesday, the highest level since November 2007. On the upside, the loonie may cross the psychologically important barrier of 0.94 in near-term. The greenback-loonie pair is presently trading at 0.9416.

/.. http://www.finanznachrichten.de/nachrichten-2011-07/20892840-canadian-dollar-climbs-to-new-multi-year-high-against-greenback-020.htm


Australian Dollar Extends 2-month High Against Greenback

CANBERA (dpa-AFX) - The Australian dollar continued its previous sessions' uptrend versus the US dollar during early New York deals Tuesday.

The aussie thus extended its fresh 2-month peak against the buck to reach as high as 1.0965 around 8:15 am ET.

The Australian currency is presently worth 1.0960 versus the greenback and a further headway could set a fresh post-float high for the pair.

/.. http://www.finanznachrichten.de/nachrichten-2011-07/20893265-australian-dollar-extends-2-month-high-against-greenback-020.htm

[FLPanhandle]

5. Great. Just great.

I leave Sunday for a week in London and Paris. I can only hope they get this resolved by Friday.

[Ghost Dog]

6. Euro Above $1.45 On U.S. Debt Concerns

VIENNA (dpa-AFX) - The euro continued its assault on the dollar but was mixed against other major currencies on Tuesday, as the U.S. edged closer to missing a dealing to raise its debt ceiling.

...

Europe's own sovereign debt crisis has been swept under the rug with last week's Greek bailout, and it remains to be seen whether the bond markets are satisfied that other European debtors will pay their bills.

Meanwhile, the European Central Bank remains in a position of 'strong vigilance' with regard to the price developments, ECB policymaker Christian Noyer was quoted as saying on Tuesday. The remarks signal the ECB may not be done hiking interest rates.

The euro rose a penny to $1.4513 versus the dollar, its highest since July 4.

/... http://www.finanznachrichten.de/nachrichten-2011-07/20894423-euro-above-dollar-1-45-on-u-s-debt-concerns-020.htm

[Evasporque]

9. We default and the dollar is kaput.

It will be worthless and we will have EXTREME inflation..

13,000 dollars for a egg mcmuffin.

[Ghost Dog]

10. Last 24 hours USDX 15 minute chart:

Source: http://www.fxstreet.com/rates-charts/usdollar-index/?version=0