USD Corrects Down, Reaching 3 Year High

The U.S. Dollar corrected down 0.3 % after the DXY reached a 3-year high yesterday. The EUR/USD traded at 1.2876 after dipping close to 1.28. The USD lost to JPY with 100.93 Japanese Yen paid for a Dollar. Oil prices, which jumped, after new clashes over the weekend between supporters of President Mursi and his Muslim Brotherhood and the military forces, left 17 dead in Cairo's streets. Brent lost 29 cents to USD 107.43 a barrel. NYMEX, New York crude, stood at 103.14. Gold gained 20 Dollars to 1228 on a weaker Dollar.

Alcoa, the alloy giant, was, as always, the first company to present quarterly results, and this time the report was slightly better than expected. Global stock markets were strong on Monday with European and U.S. indexes posting gains. Asia started the week in red Monday morning after credit worries in China. Nikkei was the only Asian exchange gaining ground on a weaker Yen boosting exports. Also on Monday, a U.S. advisory company recommended shareholders to accept Michael Dell’s USD 24.4 Billion buyout offer.

In Brussels, Greece secured a Euro 8.7 Billion lifeline. Samara's government came under heavy pressure before the meeting held by the Minister of Finance. The new bailout tranche was given on the condition that Greece deliver on its promise to cut 12,500 jobs in the public sector, and continue vigorous austerity efforts. Bailout funds might be withheld if these conditions are not met.

In a situation where the U.S. Federal Reserve (FED) due to slightly better data, might probably start tapering monetary easing as soon as September. Both the European Central Bank (ECB) and Bank of England (BOE) have stated their support for the opposite direction, thus following the FED’s earlier example to ease monetary policies and active use of the printing press. This put the British pound (GBP) under strong pressure. The USD/GBP fell below 1.50 trading at 1.4955, the lowest level seen in a long time.