New Chinese Policy Boosts Dollar

A new Chinese move to tighten its monetary policy increased risk aversion today providing the Dollar with a secondary boost after an initial one was generated by net capital flows into US assets rebounding during November.

The Euro, however, continued to suffer following a deterioration in German investor sentiment and persistent concerns about the plight of Greece’s finances.

As a result, the EURUSD broke well below 1.4300 to lows of 1.4255 before bouncing to its present value of 1.4290.

The British pound fared well today in contrast especially benefiting from the Kraft Foods agreed purchase of the UK’s Cadbury PLC chocolate company. The GBPUSD is still climbing within its well-formed bull channel posting 1.6365 whilst the EURGBP has fallen constantly during the day to its present 0.8735.

There is much speculation that a EURUSD daily close below 1.4290 could herald further major declines.