The American dollar fell on Tuesday, August 19, 2008 after a round of profit-taking gains. Crude oil prices also rose, causing Wall Street stocks to slow and renewing economic analysts to start worrying again about what these rollercoaster numbers will do to the financial sector. The drop of the dollar helped the euro get back on track for the best one day gain over the last thirty days and causing the worst daily loss on the New York Board of Trades’ .DXY index in five weeks. Even though analysts are worried about the financial sector, they believe the drop will be temporary and an upward trend will resume.
Says Gareth Sylvester, a currency strategist at HiFX in San Francisco, “We are seeing a temporary respite from the U.S. dollar strength that we have witnessed. Whenever you see the size move that we have seen, it is not untoward for the market to take a breath and have a temporary pause before the next bout of U.S. dollar strength resumes.”