Forex News: Dollar Index drops to 3 year low of 72.87

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The dollar today dropped across the board, as the world’s no.1 reserve currency’s index declined to a 3 year low of 72.87, as investors anticipated that the Fed will keep their interest rates at their current low of 0.25% for a long time to come. The current weakening of the USD is expected to continue, as the Federal Reserve announced yesterday that the current quantitative easing that it has in place was to be stopped in June and that the Fed was in no hurry for further tightening of the monetary policy.

 

The decline of the Dollar saw the single currency break past the 1.4800 barrier in today’s Asian session as the EURUSD pair gained by almost 100 pips to reach a 17 month high of 1.4880 in mid Asian session and convincingly sustain its current levels above the 1.4800 mark. The pair is currently trading around the 1.4835 levels.

 

The market is currently in anticipation of the US Annualized Gross Domestic Product for the 1st quarter, which is scheduled to come out later today at 12:30 GMT, with an expected value of 1.8% following a previous value of 3.1%. The GDP will show the monetary value of all the goods, services and structures produced in the first quarter of 2011.