Dollar mostly lower, euro holds gains
October 22, 2009
New York - The dollar was mostly lower on Thursday after traders hesitated on weak US economic data, but eventually confirmed the move into euros and other currencies seen as riskier than the greenback.
The euro slipped briefly below the 1.50 dollar level on a move into safe-haven assets, but at 2100 GMT the single currency had moved back up to 1.5027 dollars after 1.5016 late on Wednesday in New York.
The dollar was meanwhile at 91.28 yen, up from 90.96 on Wednesday against the Japanese unit also seen as a safe haven.
The market got a brief jolt that prompted a move to safety after data showed new jobless claims in the week to October 17 rose unexpectedly to 531,000.
"The data was a mild blow to the recovery trade as euro sold off modestly on the news, dropping below the 1.5000 level," said Boris Schlossberg at Global Forex Trading.
"However, overall the market showed little reaction to the numbers given the week-to-week volatility of the data."
Camilla Sutton at Scotia Capital said the move by the euro above 1.50 dollars signals "that the bullish uptrend remains intact".
"Technicals are warning that the move is not fully supported by ongoing momentum, which should be a concern for short-term traders," she noted.
"However, we continue to believe that the euro should be trading at higher levels both three and six months from today."
The key to the dollar's weakness is the near-zero interest rate policy of the Federal Reserve, Sutton said, adding that "we continue to believe that the Fed will not begin hiking interest rates until the third quarter of 2010."
The increasing signs of economic recovery have been hurting the safe-haven dollar as well, analysts say, and the greenback has seen weakening in the face of strong corporate earnings.
"Expect positive US data this week to feed into continued dollar selling," said Michael Woolfolk at Bank of New York Mellon.
In late New York trade, the dollar stood at 1.0040 Swiss francs after 1.0058 Wednesday.
The pound edged up to 1.6619 dollars from 1.6605. - AFP
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