Breaking News

Dollar recovers some gains amid renewed caution

The dollar traded mainly higher Friday as currency traders turned more cautious in the face of a struggling stock market and mixed economic news.
The euro fetched 1.4304 dollars compared with 1.4345 dollars late Thursday.
The dollar also gained against the Japanese currency, rising to 93.59 yen from 93.45 yen.

After a sharp rise Thursday to the upper limit of the range, the euro weakened despite fresh positive economic indicators that often have steered traders toward the European single currency.

A European Union survey showed business and consumer confidence in the eurozone firmed in August for the fifth month running, adding to a recent string of encouraging news for Europe’s struggling economies.

The European Commission’s economic sentiment indicator for the 16 nations using the euro single currency rose to 80.6 points from 76 points in July, continuing a gradual climb away from a record low 64.6 points in March.
In Britain, official data showed that the recession-hit economy contracted by a better-than-expected 0.7 percent in the second quarter of 2009 from the preceding quarter.

The US government reported consumer spending rose for the third consecutive month, albeit largely due to federal aid.
Better-than-expected economic indicators tend to turn traders away from the dollar, considered a safe haven in times of uncertainty, toward currencies with a higher return, such as the euro.

On Wall Street, US stocks closed mixed, with the blue-chip Dow Jones Industrial Average down 0.38 percent, ending an eight-day winning streak.
“It appears the recovery in risk appetite remains tentative at best,” said Samarjit Shankar at Bank of New York Mellon.

The yen was under pressure as concerns deepened about the sustainability of Japan’s economic recovery after the jobless rate hit a record high of 5.7 percent in July, traders said.
“Moderate selling of the yen emerged after the release of weak indicators, including the jobless rate,” said Akira Takeuchi, a dealer at Chuo Mitsui Trust Bank.

The market also was bracing for Japan’s general elections Sunday, in which Prime Minister Taro Aso’s ruling coalition looks likely to suffer a major defeat against the opposition Democratic Party of Japan (DPJ), according to the latest polls.

The center-left DPJ is seeking to end more than half a century of almost unbroken conservative rule.

In late New York trade, the dollar rose to 1.0593 Swiss francs from 1.0585 late Thursday.
The pound was steady, at 1.6269 dollars compared with 1.6268.


Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.