Dollar index hovers close to one week low

The dollar hovered close to a one-week low point against a basket of currencies today, but recent signs that the US economy is improving and rises in the country’s Treasury yields were expected to offer the greenback some support, reports Reuters.

The dollar index was at 79.449, having clawed back some ground after dropping to 79.354 on Monday, the lowest it has been since 9 March. One possible support sits near the 100-day moving average of 79.30. Meanwhile, the euro remained steady at $1.3240, having gone up to a one-week high close to $1.3266 at one stage on Monday.

Market players claimed there were no apparent reasons for the drop in the dollar and the rise in the euro on Monday, but there was some market talk about rumours that United Parcel Service Inc will purchase Dutch group TNT Express for 5.2bn euros ($6.85bn).

Whatever happens, the euro is likely to be vulnerable against the greenback in the near term, due to the diverging outlooks for the eurozone and US economies, said BNP Paribas’s FX strategist Rob Ryan in Singapore. He said that he thinks the downside of the euro is probably slightly more vulnerable due to the continued improvement in data from the US.