Light at the end of the tunnel for USA

As oil prices continue to ease off and the Eurozone starts to stagnate, currency speculators are betting that America will soon see better economic times.

Image by flyjetz 

Whisper it quietly, but currency speculators are beginning to bet that the worst could be over for the ailing US Dollar. Late last week, the US stock market had one of its sharpest positive surges for months, while the US Dollar saw the biggest single-day gains against the Euro for 8 years.

The strong showing took the greenback to its highest level against the Euro for 5 months, while it moved to an even loftier position against Sterling, reaching a 20 month high. The Euro dropped half a percent against the Sterling, which will come as welcome news to Brits holidaying in Europe this month.

Indeed, much of the dollar gains were sparked by comments from the European Central Bank, which painted a gloomy picture for economic growth in the Eurozone for the rest of this year. The Dollar also saw strong gains against other currencies, including the Swiss Franc, the Canadian Dollar, the Japanese Yen and the Australian Dollar.

This could mark the end of a long period of weakness for the dollar, driven by high commodity prices and comes on the back of a 22 percent fall in the cost of crude oil over the past month, from highs of $147 a barrel down to just under $115 a barrel.

Overseas property investors should certainly be keeping an eye on developments in the currency markets, as there are a ream of currencies that could also soon begin to rise in relative terms, if the Dollar continues to strengthen.

Countries that have their currency pegged to the dollar, such as those in the Caribbean and Middle East are also likely to see their currencies gain against the pound and Euro if this trend were to continue. However, with the current volatility in stock and currency markets, any bet in this sector is something of a speculation.