Is The US Dollar Really On The Point Of Improving Its Standing?

Two news stories in particular have made interesting reading for those who are interested in the world of Forex trading.  They are both from the same website – forexrate.co.uk.  The first one focuses on the dollar’s performance against two other major currencies, and it can be read here.  The second one can be read here and is more positive overall.

But taking a closer look at how the dollar has performed against the Euro in the last six weeks or so does reveal an interesting picture.  For starters it is actually worse off than it was back then.  Any figures you see now on your currency converter will not be as enthusiastic as they were just six weeks ago.  On the first of March the US dollar could bag a total of 0.7908 Euros to the dollar.  Now it is considerably lower than that – but let’s see how that path was trodden.

The exchange rate reached a peak of 0.7964 that week before finishing up on 0.7900 as we went into the weekend.  A slight improvement was noted on the opening salvo of the following week – to 0.7958 – before things went on a downward slide.

Friday the 13th certainly didn’t prove to be full of good news for the dollar as it could only claim 0.7748 Euros by the end of that day.  The next seven to ten days showed a lot of uncertainty and instability as the figures dipped further away from the dollar and more in favour of the Euro.

A dip down to 0.7667 on the 16th was rectified the following day before dipping down again to 0.7616 on the 18th.  But then it fell into different territory altogether, reaching a low point of 0.7314 by the end of the next day’s trading.  The dollar managed to scrape up a slight improvement by the close of the week, to 0.7380, but that was little comfort given the amount of ground it had lost.

By the time we were deep into the next week’s worth of trading, we did see the US dollar trying to regain some strength.  After some mid week tussling we did eventually see a closing figure which was better for the dollar – closing on 0.7521.  But it was still a distance away from the figure it had started the month on in the first place.

The next week saw March give way to April, and as it did the US dollar seemed to find something from somewhere to battle back against the Euro.  It should have done too, as the Euro was not well placed to be the currency that was in the lead in this situation.  The countries which are using the Euro are not in the strongest positions economically speaking.  And yet if you compare that to the fact that many people still regard the US as the strongest economy out of a bunch of weak ones at the moment, it seems only right that the US dollar should perform the best out of all of them.

The week ending the 3rd April saw another dip backwards though for the dollar, as it claimed just 0.7448 Euros in total.  The following week was the first of the Easter weeks, as just four days worth of trading awaited us.  This meant the 9th was the last day before the long weekend, and we finished up on 0.7534 going into the break.

So the US dollar was doing a little better than it had originally, but on the whole it still had some work to do to get back on a stronger footing with the Euro.  If we have seen one thing over and over again lately it is the fact that every currency has had troubles and times of weakness.  This is likely to continue into the future too, as the economy and the recession both take their toll on even the strongest currencies.

So will we see the US dollar get the better of the Euro once more?  It seems hopeful that it will, although we will have to see whether it actually comes to pass or not.  It looks promising however.