Tags: Dollar

Dollar Hits New 14-Month High Versus Euro

Friday, 14 May 2010 07:09 AM

The dollar extended its gains versus European currencies Thursday, hitting a new 14-month high versus the euro, as traders weighed the improving economy in the United States against debt problems in continental Europe and Britain.

In late trading in New York, the euro slid as low as $1.2520, its weakest point since March 2009. Late Wednesday, it traded at $1.2631.

A nearly $1 trillion emergency financing deal for indebted countries using the euro from the European Union and the International Monetary Fund, announced over the weekend, helped send the euro as high as $1.3048 early Monday. But concerns over the cost to European countries, which must raise the low-cost debt for their struggling neighbors, and the strangling effect of cuts in government spending on stagnant or shrinking economies such as Greece, are now weighing on the common currency.

The European Central Bank is now also more likely to be one of the last central banks of the major economies to raise interest rates, analysts say. Raising rates tends to increase the value of a currency.

In the U.S., economic data out Thursday suggested the economic recovery is gaining traction in the labor and housing markets. The number of unemployed people filing for jobless aid dropped 4,000 last week to a seasonally adjusted 444,000. It's the fourth straight week of sliding claims and signals the labor market is recovering. The number of households facing foreclosure last month dropped 2 percent, the first yearly decline in five years, according to market tracker RealtyTrac Inc.

Freddie Mac, the mortgage finance company, also said mortgage rates were at their lowest point in the year. That may prompt more home purchases as borrowing remains cheap, boosting the construction sector.

In other late trading in New York, the British pound dropped to $1.4609 from $1.4821, while the dollar rose to 1.1172 Swiss francs from 1.1102 francs.

The dollar fell to 92.72 Japanese yen from 93.21 yen and dipped to 1.0195 Canadian dollars from 1.0198 Canadian dollars.

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The dollar extended its gains versus European currencies Thursday, hitting a new 14-month high versus the euro, as traders weighed the improving economy in the United States against debt problems in continental Europe and Britain.In late trading in New York, the euro slid...
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2010-09-14
Friday, 14 May 2010 07:09 AM
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