Dollar set to ride out the storm
The dollar is enjoying a period of sustained strength, as US officials expressed confidence in the wake of the hurricane season and gave indications of a steady approach to the interest rate.
This morning the dollar stood at 1.2059 to the euro and 1.7673 to the pound.
In the last three weeks the American currency market has been dominated by news of the two main hurricanes - Katrina and Rita - which battered the Gulf Coast and threatened oil refineries across the region.
However, the Federal Reserve has since suggested the impact of the storm will be felt only in the short-term, with the currency markets ultimately riding out the hurricanes.
While the full impact of the hurricanes on the economy has yet to fully materialise, analysts are beginning to express optimism at the prospects for the dollar in the medium-term.
Currency strategist Umberto Alvisi, who works for Credit Suisse First Boston, told Bloomberg there was a bullishness "on the dollar across the board", with the plans for steady interest rate rises set to bolster the currency.
"The currency market is increasingly coming to the view that the Fed is going to keep hiking this year. That scenario obviously favours the dollar," he explained.