USD Rallies Against Other Major Currencies

August 30, 2008 by admin · Leave a Comment 

On Friday Aug 29th, the U.S. Dollar (USD) strengthened against most major currencies.  Although a drop in oil prices did strengthen the USD, many other factors were involved.

The most dramatic currency drop was the British Sterling (GBP) which reached a new 13-month low. Over the course of August, the currency plunged 1600-points.  This has little to do with the strength of the U.S. and everything to do with the weakness of the UK economy.  The UK has been experiencing its own housing sector collapse and related credit struggles.  There just appears to have been more of a lag in the effects on the national currency than there was in the U.S.  As the U.S. currency has stabilized for the most part, Great Britain’s has finally dropped.  It will be interesting to see if the Sterling has reached its low or not.

The Euro (EURO) has been gradually falling and it fell even further against the USD on Friday Aug 29th.  Experts have suggested that this is due to a combination of a brake in the European economy and the record breaking inflation currently being seen in the U.S..

The Canadian Dollar (CAD) also declined and traded at session lows against the U.S. Dollar on Friday Aug 29th as investors were unimpressed with the growth data for the Canadian gross domestic product.

Other currencies showing a weakening against the USD include:

The Singapore Dollar (SGD) - Due to EURUSD weakness and weak retail sales.
The Mexican Peso (MXN) - Due to U.S. personal income data causing increased fears about the future of Mexican exports.
The Australian Dollar (AUD) - Due to narrowing differentials between U.S. and Australian interest rates.  August was the AUD’s worst month since February 1989.