Dollar Weakens before Important Reports

U.S. dollarThe U.S. dollar declined today against the other major currencies, except yen, after rallying for three days, as the investors sought a technical correction before some important macroeconomic reports to be released today in United States.

Federal Reserve Chairman Ben Bernanke said yesterday that the new fiscal policies wont’ produce a long-term recovery effect on the whole economy, hinting that the additional monetary measures will be used to ease the financial conditions. But those measures may also press on the dollar. Traders already started to include this information into their bets against the greenback.

Although many analysts believe that the first-in-first-out rule will work when the current crisis will be over — meaning that the U.S., which entered the recession first, will be out of it before Europe or Japan, some point out that the bad news are still coming out mostly from United States. Some even say that the consequences for U.S. will be much more serious than for any other developed country.

EUR/USD rose from 1.3178 to 1.3206 as of 9:05 GMT today after reaching as high as 1.3336 earlier. GBP/USD went up from 1.4507 to 1.4605, while the daily high was reached at 1.4706; USD/JPY rose from 89.35 to 89.57.