Friday June 19, 02:31 PM
Dollar firms on upbeat US data
LONDON, June 19, 2009 (AFP) - The dollar firmed against the euro and yen on Friday as surprisingly strong US economic data raised hopes that recovery may be taking root in the world's biggest economy, traders said.
In late morning trade in London, the European single currency fell to 1.3895 dollars from 1.3901 dollars in New York late on Thursday.
Against the Japanese currency, the dollar grew to 97.08 yen from 96.55 yen on Thursday.
The greenback has won support ahead of the weekend after business research firm The Conference Board on Thursday said its May index of leading economic indicators, a measure of conditions in the coming months, rose 1.2 percent from April, beating forecasts for 1.0 percent.
A Philadelphia Federal Reserve survey on regional manufacturing was also better than expected, while a report on US weekly jobless claims was roughly in line with expectations and offered hints that more unemployed are finding jobs.
While the US unit has in recent months served as a safe haven from global financial uncertainty, investors have also begun to shift to other currencies based on the strengths of those currencies' respective economies, dealers said.
"As the level of panic in financial markets is falling, traders are changing gears on buying currencies that attest to strength in the global economy," said Sumitomo Trust and Bank foreign exchange strategist Jitsuo Tachibana.
But other investors warned that concerns over the health of US public finances with its massive budget deficit were likely to cast a shadow over the recent encouraging data.
Washington will issue a record 104 billion dollars in new bonds next week, and traders "will be nervously watching for how this jump in supply is absorbed with implications for the dollar and bond yields," NAB Capital strategists wrote in a research note to clients.
The auction comes as the Obama administration unveiled a financial overhaul that includes expanding the power of the Federal Reserve to oversee regulation on all risky finance firms or lenders.
Investors will also be waiting for the Fed's monetary policy meeting beginning next Tuesday for clues on the outlook for interest rates.
In London trade on Friday, the euro was changing hands at 1.3895 dollars against 1.3901 dollars late on Thursday, at 134.86 yen (134.23), 0.8493 pounds (0.8508) and 1.5125 Swiss francs (1.5099).
The dollar stood at 97.08 yen (96.55) and 1.0888 Swiss francs (1.0861).
The pound was at 1.6355 dollars (1.6331).
On the London Bullion Market, the price of gold fell to 936.75 dollars an ounce from 940.50 dollars an ounce late on Thursday.
|
|
|
Send Article by Email
Send Article by IM
Blog This with Y! 360
Printable View
