Action Insight Weekly Report 5-23-09

Dollar Dived on Rating Worry, What Could Trigger a Rebound?

The greenback was under massive pressure last week. Indeed dollar index peaked on Monday and at 83.22 and dived to as low as 79.81 on Friday without looking back.

Selling in dollar started to intensify after FOMC minutes showed downgraded growth and employment outlook in revised projections and indicated that the committee members considered increasing the amount of asset purchases. Additional pressure was seen after S&P downgraded UK's outlook which prompted worry that US may eventual surrender its AAA debt rating due to increasing debt load.

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