The US dollar received a surprise boost in today's trading
following the announcement by President Barack
that al Qaeda headman Osama bin Laden was killed in a raid into a
Pakistani town just north of Islamabad. The celebrations erupting
throughout US cities created an atmosphere of euphoria that has
assisted in a short-term rebound in optimism which lifted the
dollar in today's early trading hours.
Though bin Laden's death is not an event directly linked with
market activity, the news came at a time when both
Europe and Japan were experiencing thin trading
environments from holiday celebrations
. As such, this surge in excitement regarding the political sphere
of American life spilled over into the illiquid market generating a
mildly bullish bump to the greenback.
The dollar quickly rebounded against a number of its rivals,
pushing towards 1.4807 from its recent 17-month high of 1.4900.
Economic data releases, however, have pushed the pair back into its
bullish channel, currently returning to the aforementioned
Following this morning's announcement, the Institute of Supply
) also published its Manufacturing PMI data, as well as its report
on manufacturing prices, both of which showed higher than expected
growth in production inflationary figures. The report coincided
with data which revealed a 1.4% jump in construction spending,
beating out forecasts for a 0.4% growth, which further supported
the notion that May housing figures should be higher than
These economic data releases, along with the announcement of bin
Laden's death, assisted in a short-term rise in greenback values,
but also assisted in the rapid rebound as traders took cue to take
profit on the dollar by remembering that very little is supporting
its current rise outside of short-term speculation. The buck has
now returned to its bearishness and appears to be on track to
remain as such for the rest of the week.