US Dollar Surges on Tapering Implications for Strength of US Economy

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Financial Spreads: Spread Betting and CFD Trading

Forex Trading

: 20 December 2013

The US dollar continued its strengthening versus the euro, largely on the tapering news.

Forex spread betting markets seem to have interpreted the move as a sign that the American economy is gaining momentum compared to its European counterpart, pushing the shared currency 23 points down to $1.3660.

Europe still has plenty of challenges on its plate going into the new year and so some may be asking whether the dollar has turned a corner.

Forex Trading

: 19 December 2013

Last night, the Federal Reserve cut back on its monthly stimulus package by $10 billion.

This was a significant display of confidence regarding the economy and the labour market.

Meanwhile, the interest rate was left unchanged near zero, with Bernanke saying that it will stay that way as long as unemployment is more than 6.5%.

This renewed confidence from the world's biggest economy, along with data suggesting that the outlook for its job sector will improve next year, has attracted plenty of demand for the dollar.

In addition, the euro failed to spur similar interest as EU officials met yesterday to discuss the banking union.

As a result, the EUR/USD pair dropped by 80 points to close at $1.3685.

Forex Trading

: 18 December 2013

The Eurozone saw its own inflation drop to a four year low of 0.9% last month, fuelling fresh concerns regarding deflationary pressure.

However, with euro investors also awaiting the conclusion of the FOMC meeting, the bears were rather more timid than they might have been, with the shared currency finishing just 7 points down at $1.3760.

Forex Trading

: 17 December 2013

Manufacturing in the Eurozone expanded at a faster than anticipated pace, pushing the shared currency 32 points higher against the dollar to $1.3761.

It appears that forex investors could be back in a risk-on mood, with concerns over a possible reduction in QE having less of a bearish impact.

That could point towards the best scenario for the Fed, with markets capable of sustaining themselves.

Forex Trading

: 16 December 2013

Ahead of this week's FOMC meeting, demand for the dollar was boosted by another set of good results for the American economy.

Whilst the Eurozone is also on the mend, it appears that all eyes in the spread betting markets are still on the US when it comes to who might start tightening monetary policy.

As a result, the euro lost 16 points to $1.3736.

By Jonathan Sudaria, 20 December 2013

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