The US dollar slumped to a 2010 low against a basket of currencies on Thursday after Singapore let its currency rise but analysts saw increasing chances of a dollar rebound with negative sentiment so high. The Australian dollar, which boasts the highest yield among major currencies, soared to its strongest since the currency was floated in 1983 as investors dumped the US dollar on expectations the Federal Reserve would start printing money with further quantitative easing as soon as next month.
The dollar index, which tumbled to its weakest since December, is on course for a test of trendline support at 75.95, with its November low of 74.17 then not far away. The 75.95 target is the trendline from two major lows in July 2008 and in November 2009. CMC Markets places support after 74.17 at 70.70, the low from March 2008.
The dollar index was last down 0.6 percent at 76.599. The euro surged to a more than eight-month high of $1.4123 on trading platform EBS and faces near-term resistance at $1.4195, the January 25 high. Traders said the euro still has room to go, with strong resistance not seen until $1.45. The pair was last at $1.4062, up 0.7 percent. The greenback fell to a 15-year low of 80.88 yen on EBS, despite wariness about Japanese intervention, and looked set to challenge its record low of 79.75 hit in April 1995.
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