The Greenback depreciated to its lowest level in two years against a basket of currencies, as speculators believed that the Fed shall continue to inject money into the US economy after its Quantitative Easing plans of purchasing Treasury Bonds worth USD $ 600 billion expires in June. The Fed is also expected to maintain overnight lending rates to banks between 0 and 0.25 percent. In such a backdrop, the US Dollar is expected to maintain its low value against other major currencies. The Euro rose by 0.2236 percent to be at 1.4677 against the Dollar.
Standard & Poor revised Japan’s sovereign-rating outlook to “negative”, since exports have been severely hampered from the country after it was hit by last month’s devastating earthquake and its resulting tsunami. This has led to damping investor’s confidence in Japan’s ability for carrying out reconstruction projects immediately, leading to the depreciation of the Yen. The Dollar appreciated by 0.1738 percent to be at 81.6947 against the Yen.
Meanwhile, reports from the Australian government showed that the consumer prices have increased in the country the most this year since 2006. This increased speculation that the central bank will increase interest rates in order to curb inflation, hence leading to an inflow of hot money and causing the Australian dollar to appreciate. The Australian Dollar was 87.6902 against the Yen.