Manufacturing Report Keeps U.S. Dollar Under Pressure

The U.S. dollar started another week with optimism weighing negatively on its outlook, as a report is likely to indicate the highest manufacturing level in the United States in almost a year, attracting investors to higher-yielding currencies.

The U.S. dollar is posting losses versus its Canadian and Australian counterparts today after former Federal Reserve Governor Alan Greenspan said that the worst recession in decades is likely to be ending, decreasing attractiveness for the safety profile of the greenback, and attracting investors to yield. The Dollar Index was near this year’s low before a U.S. manufacturing report which is likely to reach the highest levels this year, rectifying evidences that the global slump is becoming a surpassed event, bringing investors to equities markets and emergent countries currencies. In Asia, currencies were favored by a report in the end of last week showing that South Korea grew at the fastest pace in six years.

The world is showing multiple signs of recovery, this time steadily, and this is dollar-negative, according to specialists. Oddly enough, favorable news in the U.S. economy are being interpreted as a sign of global economic recovery, pushing the dollar down, even if the nation’s economy is recovering.

USD/CAD fell to 1.0730 as of 10:15 GMT from an opening rate yesterday of 1.0775. EUR/USD is being traded at 2-month high levels at 1.4286 after topping at 1.4310 hours earlier.

Where Will Brazil’s Real Rally Go?

The Brazilian real posted another day of heavy gains versus the U.S. dollar indicating that the South American currency is one of the most preferred among risk thirsty traders.

The Brazilian currency reached an eleven-month high against the U.S. dollar as manufacturing in China, Brazil’s most relevant commercial partner, had the highest rise in a year, spurring demand for the real and improving attractiveness in South American stock exchange markets. The real climbed more than 1.5 percent versus the greenback today.

USD/BRL traded at 1.8364 as of 20:40 GMT from 1.8651 last Friday.

Canadian Dollar Climbs Fueled By Stocks Rally

The Canadian dollar reached a 10-month high versus its U.S. counterpart as corporate earnings, mainly in North America, but also in Asia and Europe, posted better-than-expected numbers, pushing investors to the already attractive Canadian currency.

The crude oil price rally during the past weeks has been favoring the Canadian dollar massively, since one of the main national exports to the U.S. is the oil, which experiences an increase on its price as demand for energy tends to grow in a recovering economy. Corporate earnings this week in the U.S. and Asia helped high-yielding currencies to gain even further, as the greenback and the yen tumbled to the lowest levels in more than a year. Manufacturing in China figures published yesterday, indicated the highest climb in a year, suggesting that the Asian nation is also being helped by global signs of economic recovery, as a higher demand influences its industrial production.

Analysts state that equities market gains have still a reasonable range to continue, and that the Canadian dollar is very likely to follow these movements. The crude oil may also help the Canadian dollar to climb, and it is not impossible that the loonie will be traded one-to-one versus its U.S. counterpart before the end of the year.

USD/CAD traded at 1.0697 as of 9:13 GMT from a previous rate yesterday of 1.0780.