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Dollar rises as fed speaks and oil plunges

Thu, Jul 17 2008, 12:21 GMT
by Benny Menashe

Finotec Group Inc.

The dollar increased the most against the euro in almost two weeks as declining crude oil prices and better-than-estimated earnings at Wells Fargo & Co. pushed U.S. equities higher. An index gauging the greenback versus the currencies of six U.S. trading partners rose a day after the dollar plunged to the all-time low against the euro. ``If equities can hang in, the dollar can certainly hang in,'' said Alan Ruskin, head of international currency strategy at RBS Greenwich Capital Markets in Greenwich, Connecticut. ``We had attempts to trash the dollar yesterday and ended up unwinding a lot of that. We could see that continue today.'' The dollar rose 0.6 percent to $1.5822 per euro at 4:35 p.m. in New York, from $1.5911 yesterday, when it declined to a record low of $1.6038. The dollar appreciated 0.4 percent to 105.14 yen, from 104.73. The euro declined 0.2 percent to 166.34 yen, from 166.65. EUR/USD currently trading at 1.5856 as of 8:23 am, GMT

The Australian dollar fell from a 25-year high after central bank Governor Glenn Stevens signaled interest rates may be high enough to keep inflation in check. Australia's dollar snapped a four-day advance after Stevens told economists that the chances of ``keeping inflation low over the medium term are good,'' suggesting the RBA may have finished raising rates. The RBA's outlook on inflation ``does involve a period of significantly slower growth in demand in Australia,'' Stevens said in a speech in Sydney today. ``We still expect inflation to fall back to 3 percent by mid-2010, and to continue declining gradually thereafter.'' AUD/USD currently trading at 0.9759 as 8:25 am, GMT

The dollar traded slightly higher versus the yen on Wednesday, erasing earlier losses, drawing support from a drop in oil prices. The dollar was at 104.70 yen, little changed on the day, and moving away from intra-day lows at 103.79 yen. At the same time Demand for currency options is suggesting that the euro will continue to decline against the U.S. dollar after reaching the highest level since the 1999 introduction of the shared currency. USD/JPY currently trading at 105.39

Today's Economic Events

Published on  Thu, Jul 17 2008, 12:29 GMT