Reasons For Possible Continued Dollar Weakness

Will the greenback remain weak in currency trading?

For now, the U.S. dollar is a little bit higher in forex trading on the currency market. The euro is struggling to maintain 1.50, and the U.K. pound is struggling as data continues to show that it has the least stable of economic recoveries underway. But that doesn’t mean that the greenback is headed for a stronger trend in currency trading.

Indeed, there are reasons that dollar weakness could remain the overall story in forex trading. GFT’s Kathy Lien offers in FX360 these five reasons that the greenback could remain weak in currency trading:

1. Dollar carry trade could be overused but not overplayed.
2. G20 could continue to support economic stimulus measures.
3. Timothy Geithner may avoid talking about the dollar in forex trading.
4. Economic fundamentals may bring the reality of a weakened environment to the fore.
5. Little technical support for the greenback in currency trading.

Any of these reasons could add to dollar weakness in forex trading. However, if all five combine, there is little hope in the near future for the greenback to regain a position of strength in currency trading.