Dollar Declines, Metals Higher in Thin Markets

November 23, 2012 11:25 AM EST
Christmas came early for metals traders and investors in CurrencyShares Euro Trust (NYSE: FXE). EUR/USD gained 1 percent in thin trading this Friday, while the dollar index declined to near 80.3.

The weakening dollar is playing well for traders in gold and other precious metals, with SPDR Gold Shares ETF (NYSE: GLD) and iShares Silver Trust ETF (NYSE: SLV) both posting solid gains.

Early indications of strong holiday sales, which follows up on strong housing data last week, could be helping fuel the dollar decline, as positive data is seen weakening the Fed's proposed stance on unlimited QE.

Budgetary developments in Europe may also be helping undercut the dollar index - which trades against a basket of currencies including the euro – as Germany may win the fight for austerity in EU budgetary discussions.

It is also worth noting that, considering stunted trading in the U.S., today's dollar-decline may raise a few eyebrows come Monday morning, as volume picks back up.

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