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The dollar rose broadly and hit a one-month high against the euro on Monday as investors worried whether the European economy will manage to handle a US recession
The dollar rose broadly and hit a one-month high against the euro on Monday as investors worried whether the European economy will manage to handle a US recession. The euro was heavily short-covered against the dollar and slid to a four-month low against the yen, hurt by ongoing concerns that
euro zone economies may weaken more than expected this year. The Euro extended losses from last week, after a European Central Bank official said economic growth in the region could slow more than expected this year. The dollar traded around the levels of 1.4500 against the Euro, 106.10 vs. the Yen and 1.9495 vs. the sterling at 09:20 (GMT).
Sterling fell after property Web site Rightmove on Monday said that annual house price inflation in England and Wales this month hit its lowest since December 2005, adding to the view that the British housing market may weaken, and hurt the economy. "Up until recently there had been an argument that even if the U.S. economy performed poorly, there would be a decoupling and other countries would be alright," said Taisuke Tanaka, foreign exchange strategist for Lehman Brothers. "But at a time when the outlook for the U.S. economy keeps worsening, it is becoming clear that it's not easy to say that
countries other than the United States are holding up firmly," Tanaka said.
Risk aversion is giving strong support to the yen as carry trader continues to unwind. "The risk reduction issue remains a big theme in the market," said a trader at a Japanese bank. He said that given plunging stock markets, the yen had more room to gain in the near- to mid-term as investors continue to dump risky positions in high-yielding currencies that were funded using the low-yielding Japanese currency. The Yen traded around the levels of 106.15 vs. the dollar, 153.95 against the Euro and 207.05 vs the sterling at 09:20 (GNT).
- Equity markets in Asia registered a three-peat of initial early strength followed by modest late-session profit-taking, with all three major indices trading in accordance with...
OverviewThe Forex market has begun to return to some form of normality following the holidays. The EUR copped it overnight as speculation swept the market about the ECB...
Previous session overviewOn Monday, the dollar posted steep gains against the euro, the yen and the Swiss franc amid optimism that a broad-based U.S. economic stimulus plan will...
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