Dollar hits one-month high

Posted Dec 7th 2009 3:30PM by Connie Madon
Filed under: International Markets, Economic Data, Commodities, DJIA, Federal Reserve

The US dollar index hit a one-month high against a basket of currencies. Investors are betting that improved labor markets will force the Fed to raise rates.

The US dollar index climbed to 76.183, the highest since November 4. The euro traded at $1.4788, down from Friday's $1.4846. The dollar was at 90.07 yen, from 90.51 yen. The UK pound was at $1.6347, from $1.6449. The dollar was at 1.0219 Swiss Francs, from 1.01.70.

Good news on the economy is viewed as putting a damper on ultra low interest rates. The market will be looking to the Fed for clarity on whether November's job report will prompt a hike in rates.

For most of this year, the weak dollar fueled rallies in stocks and commodities. Gold soared to over $1,200 per ounce. Friday gold got hammered, down over $50.00 per ounce (each $1.00 equals $100.00.) Selling of gold continued today. Gold usually moves opposite the dollar.

So, until the Fed meets next week, the markets are in a state of mild confusion. Do you take profits here? Do you buy the dollar? Do you sell gold? Do you sell commodities?

As previously mentioned: "When in doubt, don't," or "Stand aside."

Do you believe the Fed should raise rates now?

Tags: dollar, gold, inthenews