The U.S. currency experienced its highest rise since February 14 on Monday. Moving up to $1.7863 against the pound, the U.S. dollar rose to $1.4557 per euro as the oil prices dropped. This remarkable advance is the strongest level achieved by the U.S. dollar against the British pound, after a landfall in Louisiana by the Hurricane.
A foreign exchange analyst and economist in Tokyo, Satoru Ogasawara said,” The decline in oil and weak economic activity in Europe are contributing to the dollar’s rise.” He further added: “Should oil continue to fall, it would mean lower energy costs for U.S. manufacturers and increased purchasing power for the U.S. consumers.” However, this rise in the dollar is likely to support the economic growth in the U.S., which will help the nation to recover from a slump. Moreover, as forecasted by Ogasawara, the currency may stand somewhere in the middle of $1.42 to $1.52 per euro in the coming month.
Cheaper oil prices are considered to be an outstanding factor in boosting the greenback, with crude falling to $110.60 a barrel. This price fall of 4.2 percent is the lowest since May. In this context, Roddy MacPherson, a fund manger at Scottish Window Investment Partnership Ltd. said,” The dollar is cheap. The U.S. has been quite preemptive in bringing rates down and that bodes better for the U.S. relative to many other countries.”
Further more, the Federal Reserve’s seven rate cuts during the last year are also boosted the rise in the U.S. currency prices.