The dollar finally saw a rally on comments from the U.S. Treasury Secretary Timothy Geithner that major currencies are “in alignment” and that he would assure leaders at Group of 20 meetings that the U.S. is not trying to weaken the dollar.
The greenback surged to 81.83 yen before trading at 81.10 yen as of 8:17 a.m. in London, from its trading rate at 81.09 yen in New York yesterday. It reached 80.85 for a brief period in New York yesterday, its weakest dip since April 1995, when the post-World War II low of 79.75 was set. The dollar also saw its fortunes rising against the euro as it rose to $1.3956 per euro, from $1.3964. The yen traded at 113.18 per euro, down from 113.23 a day earlier.
The yen has fared well against the dollar although it dropped to 82.88 per dollar level on Sept. 15, showing a significant increase despite a number of economic stimulus packages announced by the Japanese government.
The greenback is not expected to sustain its rally as the Fed is expected to announce further quantitative easing measures in near future, according to analysts closely watching the currency market.
Positive economic news from China impacted the Australian dollar as it slipped to 98.33 U.S. cents, down from 98.71 cents. It saw a rally of up to $1.0004 on Oct. 15, which was the highest since the Aussie was freely floated in 1983. The Aussie also dipped against the yen to 79.76, from its previous trading rate of 80.04 yen.
