Saturday, December 19, 2009

Dollar Hits Three-Month High

The dollar bull run continues.

The U.S. dollar hit a three-month high versus a basket of currencies this week. The Dollar Index, which the ICE futures exchange uses to track the dollar against the euro, yen, pound, franc, Canadian dollar and Swedish krona, rose 1.5 percent to 77.721 this week, from 76.573 on Dec. 11, the biggest rally since the five days ended June 5. The index touched 78.141 yesterday, the highest level since Sept. 4.

The index has appreciated 4.8 percent from this year’s weakest level reached on Nov. 26.

The dollar appreciated 1.9 percent to $1.4338 per euro, from $1.4615 last week. It strengthened yesterday beyond $1.43 for the first time since Sept. 4. The yen strengthened 0.4 percent to 129.75 per euro, from 130.24. The dollar advanced 1.6 percent to 90.49 yen, from 89.10. The euro decreased 1.3 percent to 88.74 U.K. pence.

If you don't print dollars, which Bernanke hasn't since 02-09, the price of the dollar goes up in terms of other currencies that are increasing in supply because their countries are printing more of the local currencies.

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