Concerns about slowing global economic growth and widespread drop in commodity prices on Thursday sharply pushed up the U.S. dollar, which had previously resided in the doghouse for a long time.Dollar Index ICE, which reflects the value of the U.S. currency against a trade-weighted basket of currencies, has demonstrated the most significant one-day rise in percentage terms since November. The euro / dollar fell by about 2% compared to the previous day's close, having fallen victim to disappointing comments from the head of the European central banks and risk aversion.
Unexpected increase in applications for unemployment benefits in the United States continued its string of poor economic data this week, an effort to concerns about the possibility of weakening global economic recovery.
"The power of the dollar reflects the fact that investors have sold a lot of dollars when they were optimistic about the risk. When they began to get rid of the risky positions they had to buy dollars again, - said Stephen Inglender, a strategist at Citigroup. - It reflects the fact that U.S. economic data really deteriorated. "
As a result, market participants reduce positions by recently becoming strong currencies such as euro and commodity prices, which are denominated in U.S. dollars. The price of oil on the basis of trading in New York fell below $ 100 a barrel, while futures for silver fell 8% by providing additional support to the dollar.
Nevertheless, considered to be against the currency of refuge for the Japanese yen the dollar fell below 80 yen for the first time since March 18 Group of Seven held a joint currency intervention.
On Thursday evening to EBS, the euro / dollar was trading at 1.4541 against 1.4827 late Wednesday. The dollar / yen was trading at 80.05 against 80.62 and the euro / yen - at 116.43 against 119.47. Intraday GBP / USD was trading at 1.6384 against 1.6489, and the pair dollar / Swiss franc - at 0.8702 against 0.8616.
The ICE Dollar Index stood at 74.086 against 73.031.
Investors were especially prone to exercise caution before leaving on Friday of data on the number of jobs outside agriculture in the USA, as unexpectedly low figure may increase concerns about global economic growth, analysts say.
Earlier during the session disappointing comments from European Central Bank President Jean-Claude Trichet, have weakened the market expectations on interest rate rise in June, and provoked the fall of the euro and the closing of short positions on the dollar.
The U.S. dollar also strengthened against the Australian and New Zealand dollar, which was followed down the prices of commodities.
Meanwhile, the yen was trading better than other currencies, gaining the support of the demand for safe-haven assets. Pair falling U.S. dollar / yen is below 80 again revived talk of a possible intervention by the Bank of Japan, but analysts believe that the less volatile currency market reduces the likelihood of such developments.
Nevertheless, the overall recovery of the U.S. dollar may be short-lived, as the Federal Reserve is likely to lag behind most other central banks in the policy tightening, analysts said.
