Sparked by continued optimism about the economic situation and enthusiasm surrounding the passing of the massive healthcare system overhaul, the dollar has surged this week against major currencies and commodities.

The dollar has really been driving hard against the Euro thanks to continued instability in many of the leading European Union economies and general uncertainty surrounding the Euro itself. A Euro is currently worth $1.3341. This marks a more than two pip drop in the Euro against the greenback in a little over 24 hours.

The Euro is now at its lowest level in nearly a year with a test of support at $1.29 likely, and a significant test at a major medium-to-long term support level at $1.25 perhaps in the near future. This level provided major double bottom support for the Euro-dollar ratio during the late 2008-early 2009 time period before the year made its run back up over $1.50.

The British Pound has also fallen to a level unseen since early May 2009 with a current spot rate of $1.4886. After breaking through support in the $1.49-1.50 area, the Pound appears primed for an eventual test of its major support in the $1.37-1.38 area, assuming market factors do not dictate a reversal in long-term direction.

The dollar’s has also experience gains against the Japanese Yen and most other major currencies, thanks to renewed optimism in the US economy compared to continued struggled in other parts of the world.

The stronger dollar has also driven down commodities prices this week. The current gold price spot rate is $1,086.30 after New York closes of $1,102 and change on both Monday and Tuesday.

Oil fell by 1.6 per cent on Wednesday’s New York Mercantile Exchange to a settle price of $80.61. Credit was largely attributed to the strength in the dollar, which on its own, generally lowers oil prices and gold prices.

The dollar could be setting up for a major long-term trend given the fact that it has accomplished much in the last several months despite some doubt on the real condition of the economy and no indication yet on Fed rate increases. When the Fed embarks on a likely series of rate hikes, dollar growth is likely to pick up its pace.