US dollar optimism
The United States is hoping to return to growth in the second half of the year while the dollar may strengthen in the next 12 months. Despite the financial crisis and expectations the global crisis will do much better than people think, the future outlook for the US dollar is strengthening.
There are some positives to look at when the dollar is brought up. The currency is benefiting from a higher domestic savings rate and an improvement in the trade deficit. The US trade deficit narrowed to its lowest level since November 1999, to USD26 billion in May. The labour market may also be improving as the number of people filing initial claims for unemployment benefits fell, as hopes rise the worst has passed.
The future outlook of the US dollar has the exchange rate at GBP0.6060 and EUR0.7034.
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