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[grunwald]

Weakness of US dollar continues to dominate Forex news. It is even more prevailing than the recent surge of currencies like the Australian Dollar. In fact, strong market response to Reserve Bank of Australia decision to raise interest rates as the first one of major economies, appears to be what brought the Dollar talk to the forefront once again. Great debate rages what is more important- strong dollar, presumably good for the global trade, or a weak one, in theory benefiting US manufacturers, thus speeding up American recovery.

After prolonged time of silence on the subject, official US position was voiced last week. Larry Summers, chief economic adviser to the White House as head of president’s National Economic Council said on Thursday that United States is committed to strong dollar policy. A little earlier it had been Treasury Secretary Timothy Geithner making similar remarks. Unfortunately, any such talk coming from him seems nothing more than a lip service. That’s precisely what he said few months ago during his visit to China, where he assured his hosts about safety of their investments in US. Since then, the Dollar has been in a steady downfall.

Read the rest of Strong Dollar talk and see charts.

[fire]

The yen was strong on Tuesday against the dollar and the euro after Finance Minister of Japan, Hirohisa Fujii said he will not enter the foreign-exchange market to stop yen's rise. Elizabeth Gregory, a markets strategist in Geneva at ACM Advanced Currency Markets, said: "Japanese officials are not entirely clear on how they should reign in the market and that’s really played out in terms of the direction of the yen. The commentary has been a bit muddled. They started off by saying it wouldn’t be a bad thing to have a strong yen and that caused the market to fly off in one direction.”
(source: bloomberg.com).


The yen strengthened to 90.236 per dollar and to 135.26 per euro. The euro was at $1.4969. The UK currency was at $1.6414 and 91.24 pence per euro.