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Us dollar going up with mid-east unrest

 
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Us dollar going up with mid-east unrest Can't Post
The US dollar rose one percent against European currencies and hit a three-month high versus the yen as investors fled risky assets and sought safe havens as Middle East tensions escalated.

The Japanese currency was also weaker against European currencies on expectations the Bank of Japan would tighten monetary policy at a glacial pace. The BOJ raised interest rates on Friday from near zero for the first time in six years.

The euro was down more than 0.9 percent at $1.2528 by 1000 GMT, its lowest since June 29. It had been as high as $1.2861 earlier this month before the flare-up in geopolitical tensions. The dollar rose 0.9 percent to trade as high as 117.17 yen, with gains accelerating in Europe with Japanese markets closed for a holiday. The dollar was up 1 percent at 1.2476 Swiss francs and $1.8200 per sterling.

The vehicle currency for many helped the dollar overcome soft U.S. economic data on Friday, which seemed to lessen the chance of further

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Barry
Mr. Do It All


Jul 17, 2006, 6:38 PM

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Re: [Barry] Us dollar going up with mid-east unrest [In reply to] Can't Post
The dollar hit three-month highs against the euro and the yen at the end of july ahead of comments from Fed. The market also awaited U.S. consumer price data for June to see if inflation risks could prompt the Fed to raise rates again, after data on Tuesday showed a hefty rise in producer prices in the same month.

Traders said that while the Fed continued to hike rates, the market's focus would remain on the dollar's rate advantage over other currencies.

The dollar gained broadly on figures showing U.S. producer prices in June rose 0.5 percent from the previous month, topping forecasts for a 0.3 percent climb. Also supporting the currency was data showing that the United States attracted a net $69.6 billion of capital inflows in May, more than enough to cover that month's trade deficit of $63.8 billion.

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Ruby
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Jul 25, 2006, 4:25 PM

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Re: [Ruby] Us dollar going up with mid-east unrest [In reply to] Can't Post
 The strength the US dollar garnered recently slowed after data showed that the US economy had grown by much less than expected in the second quarter.

US Commerce Department figures showed that annualised growth was just 2.5 percent in the three months to June, less than half the 5.6 percent in the first quarter and well below forecasts for a more modest dip to 3.0 percent.

The weak numbers fuelled talk that the Federal Reserve could call off a long-running campaign of interest rate increases on August 8, which would diminish the dollar's appeal against other major currencies.

But other pundits said there is still a chance the Fed could opt for one more precautionary rate hike, given concerns over inflation.

Core personal consumption expenditures (PCE) data -- the Fed's preferred inflation measure -- rose to 2.9 percent in the second quarter, well above the central bank's comfort level of 1-2 percent.

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Barry
Mr. Do It All


Jul 29, 2006, 7:08 PM

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