Fed direct loans decision and falling oil prices helps the dollar rise

The U.S. dollar has risen slightly against the Euro for the first time in three days, and part of that reason was because of the decision from Fed Chairman Ben S. Bernanke. He said that the decision to extend security dealers’ access to direct loans into 2009 was just a small part of why the dollar rose, along with the price of crude oil prices falling.

Many thought that the dollar would not do that well today as loses was made after the news yesterday over Fannie Mae and Freddie Mac concerns however China’s yuan has managed to remain higher than the dollar.

The U.S. dollar has risen by 0.5 percent to $1.5656 against the Euro, this was from $1.5726 yesterday, these figures were as of 4:08 p.m. in New York. The dollar has gained strength thanks to the Fed being committed to financial stability, Bernanke has said that they have a number of options that they are considering, one of these is to extend the duration of our facilities for primary dealers beyond year-end.

Looking at the dollar since September, the currency has dropped 11 percent against the Euro, since then the Fed has made the first of seven reductions in the target lending rate which is now at 2 percent, this had to be done as to reduce the risk of a housing slump and credit market losses from plunging the U.S. economy into a recession.

The price of a barrel of crude oil for August delivery has fallen for a second day in succession; oil has now dropped by almost 4 percent to $135.92. Just a few days ago crude oil reached a record high of $145.85, let us hope that prices continue to fall for a barrel of crude oil, this will go a long way to help fight of a recession.

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