Friday, June 25, 2010

FX round-up: Economy fears dent dollar

Date: Friday 25 Jun 2010
The latest report on American unemployment and only slightly better data on US durable goods orders sent the dollar lower versus the struggling euro.

Wall street has recently started worrying about the speed of the economic recovery again, and an as-expected jobs figure didn’t do much to calm nerves.

Weekly jobless claims dropped to a seasonally adjusted 457,000 from 472,000 the previous week, said the Labor Department's. Analysts were looking for a fall to 460,000.

Meanwhile, orders for durable goods were down by 1.1% in May, but excluding the volatile transportation sector, orders rose by 0.9% last month, according to the Commerce Department.

The euro was up to $1.2333 from $1.2312, while the dollar index, which measures the greenback’s performance against a basket of currencies, slipped to 85.73 from 85.82.

There were also declines for the dollar versus the yen, suggesting an increased desire for the perceived safety of the low-yielding Japanese currency.

In London, the pound leapt to its highest against the euro for 1½ years as the record cost of insuring Greek government bonds against default kept eurozone debt fears to the fore.

Sterling attracted fans following a largely City-friendly emergency Budget on Tuesday that traders feel is capable of tackling Britain’s record deficit. The single currency fell to its lowest since November 2008.
The British currency also traded around a one-month high against the dollar, above $1.50 at one stage, before pulling back later. 

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