By TraderVox.com
Tradervox.com (Dublin) –The greenback dropped against most of its major counterparts as speculation Federal Reserve will embark on a third round of quantitative easing rose in the market. Investors are wary of the disappointing data coming from the world’s largest economy hence they are seeking other safer currencies such as the pound and the Swiss Franc. The buck has dropped against the euro prior to a report projected to show factory orders stagnated in June. This report will confirm speculations that US economy is faltering just hours after the Institute for Supply Management’s Index showed that manufacturing in the US contracted in June.
Further, the US currency fell as safe haven demand was hampered by surge of demand of the Asian stocks which rose for the fifth day. The yen was also affected by the advance by the Asian stocks. This led to an increase in demand for commodity related currencies such as the Australian dollar which rose to within two-months high. Mike Jones of Bank of New Zealand Ltd in Wellington said that the US economy has been slowing down and further negative reports would only add to speculations of further easing which is negative for the greenback.
The greenback dropped by 0.1 percent against the euro to trade at $1.2582 at the start of trading in the Asian Session today. It had advanced by 0.7 percent yesterday. The dollar increased slightly against ht yen, trading at 79.59 from earlier level of 79.51. The euro increased against the yen from previous reading of 100.00 to 100.14; Japanese yen had advanced by one percent against the euro yesterday.
As the MSCI Asia Pacific Index of stocks rose by 0.6 percent, the Australian dollar increased by 0.2 percent against the dollar to trade at $1.0268; it had earlier touched its highest since May 4 of $1.0278.
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