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(CEP News) - The stars were aligned for the U.S. dollar on Tuesday, with several bullish factors contributing to broad-based greenback strength.
The U.S. dollar was up 0.84 to 107.28 against the yen and up 0.0098 to 1.0097 against the Canadian dollar. However, TD Securities chief currency strategist Shaun Osborne could not guess where the USD/CAD would end up next as the Canadian dollar had been as high as 1.0002 against the greenback early on Tuesday before falling victim to the U.S. dollar's strength. "Trying to divine the next move looks a bit of a toss up at this point; we did think that the bounce in spot late last week aborted the near term risk of a drop back to the 0.98 region but the June/July ratcheting lower remains in place and has the support of bearish daily DMI readings, which suggest a firm short term downtrend remains in place," he wrote to clients. "Above sustained move [daily close] above 1.0090 would severely undermine near term downside prospects from here." The U.S. dollar began gaining as crude oil fell from $132.89 per barrel at 8:00 a.m. EDT. Currently, WTI is trading down $2.70 per barrel to $129.10, off session lows of $126.36. At 8:10 a.m. EDT, speaking at the New York Public Library on the subject of government-sponsored enterprises Fannie Mae and Freddie Mac, U.S. Treasury Secretary Henry Paulson said higher food and energy prices would prolong the recovery of the U.S. economy. He added that the value of the USD would eventually reflect the strong underlying fundamentals of the economy. A strong dollar is "very important," he said, adding that he had been advocating support for the greenback for some time. At 8:30 a.m. EDT, Philadelphia Fed President Charles Plosser spoke on inflationary risks in the U.S., saying that the Federal Reserve would have to hike rates before an economic turnaround could take place. Regarding other crosses, the euro was down 0.0146 to 1.5777 while the pound sterling was down 0.0123 to 1.9910, both against the U.S. dollar. The Australian dollar was down 0.0078 to 0.9694 against the greenback. USD/JPY up 0.84 to 107.28. EUR/USD down 0.0146 to 1.5777. GBP/USD down 0.0123 to 1.9910. USD/CAD up 0.0098 to 1.0097. AUD/USD down 0.0078 to 0.9694. All data taken at 2:11 p.m. EDT. By Ryan Szporer,
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, with contributions from Erik Kevin Franco,
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and Patrick McGee,
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, edited by Nancy Girgis,
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