Tuesday, December 6, 2011

US Dollar Turns Lower on Strong German Factory Data

More good news in Europe means bad news for the US Dolla.

The dollar showed little direction versus other major currencies on Tuesday, failing to sustain its overnight gains against the resilient euro.

A brief rally brought on by S&P's downgrade warning on Germany and France fizzled out, leaving the dollar within its stubborn trading range against the euro.  The pair was at $1.3425 this morning, after the dollar topped out at $1.3322 overnight.

German factory orders recovered at a faster-than-expected pace after falling for three consecutive months suggesting that the power house of Eurozone is yet to see a general slowdown in the fourth quarter.

Fueled by foreign demand, factory orders grew 5.2 percent in October from a month ago, the Federal Ministry of Economy and Technology reported Tuesday.

Dollar Turns Lower On Strong German Factory Data

Breaking US Dollar Collapse News

What's Behind the Decline of the US Dollar?

This is one the of the best and simplest explanations we have seen:
The U.S. dollar's downward slide is accelerating as low interest rates, inflation concerns and the massive federal budget deficit undermine the currency. - Wall Street Journal, April 23, 2011
Interestingly, the Federal Reserve is responsible for, or an active participant in all three of these factors.