Reply #8: daily dollar watch

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Last trade 90.02 Change +0.08 (+0.09%)

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=5425292

Dollar Looks to CPI, Greenspan for Hints

LONDON (Reuters) - The dollar held in narrow ranges against the yen and euro on Tuesday as markets awaited U.S. inflation data and testimony from Federal Reserve Chairman Alan Greenspan that may give new clues on U.S. interest rate hikes.

Recent hawkish comments from Fed officials, including Greenspan, have boosted the dollar as investors weighed the chances of more aggressive tightening than previously expected.

Greenspan could reinforce such expectations again, while inflation may serve as another argument for tightening, especially since it has been highlighted recently by some Fed officials. The next hike may come in as soon as June 30.

"There is a lot of event risk for the dollar today so the market will be very twitchy," said Paul Mackel, currency strategist at ABN AMRO in London.

"Core inflation will be the main focus. There is also a lot of discussion as to whether Greenspan will repeat his hawkish stance."

At 7:30 a.m. EDT the dollar traded at $1.2050 per euro, steady on the day. It was a cent below Monday's three-week high of $1.1950.

Markets largely looked past the Bank of Japan's anticipated decision to keep rates on hold, awaiting more clues on U.S. monetary policy prospects.

Even though the BOJ kept monetary policy unchanged, it upgraded its view of the economy, highlighting its dilemma over a combination of rising bond yields and lingering deflation.

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http://abcnews.go.com/sections/business/US/Greenspan_CSM_040615.html

Greenspan's White House Visits Raise Questions About Policy Influence

June 15, 2004 — He's history's most famous jazz musician turned central banker. He's the most powerful financial figure in the world. And in May, President Bush nominated him for a fifth term as chairman of the Federal Reserve.

There are many ways to describe Alan Greenspan. But is he also a "social butterfly," as one economist puts it?

About once a week, the nation's top monetary official leaves the neoclassical Fed building on Constitution Avenue in Washington, and takes a limousine ride over to 1600 Pennsylvania Avenue.

On occasion, he meets with President Bush (once in 2003), but more often it's a tête- à-tête with members of his inner circle. Last year, he met with Vice President Dick Cheney seven times, with National Security Adviser Condoleezza Rice six times, and with Chief of Staff Andrew Card three times. In July 2003 alone, he met with six members of the cabinet, including Secretary of State Colin Powell.

More telling: The Republican central banker's visits to the White House have nearly quadrupled since Bush replaced President Clinton.

Those statistics make Greenspan a "social butterfly" in the White House, says Kenneth Thomas, a finance professor at the University of Pennsylvania's Wharton School, who generated the numbers.

Greenspan's private meetings at the White House are usually not disclosed at the time they take place. Nor is any record made public of what was discussed. Thomas used Freedom of Information Act requests to the Fed for Greenspan's personal calendar.

His visits lead to two intriguing questions: How involved is the Fed chairman in setting White House policy? And do those friendships with the highest level officials of the Bush administration alter what Greenspan does with interest rates?

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http://www.crainsny.com/news.cms?newsId=8186

NY employers remain cautious on hiring

Despite signs of an economic recovery, New York City employers remain cautious about hiring, according to employment agency Manpower Inc.’s quarterly Employment Outlook Survey.

Between July until September, 20% of companies plan to hire more employees, 10% expect to reduce the size of their workforces, and another 68% expect to maintain current employment levels, Manpower’s survey shows.

This summer, job prospects appear best in construction, durable goods manufacturing, and finance. Meanwhile, weakness is seen in non-durable goods manufacturing, transportation, and wholesale/retail trade.

In Manpower’s last survey, going into the April-June 2004 quarter, 16% of city employers planned to add staff while 4% expected reductions.

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http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38153.364525463-815235562&siteID=mktw&scid=0&doctype=806&

Dollar dips as tame core CPI seen holding back US rates

CHICAGO (CBS.MW) -- The U.S. dollar fell against its major rivals as a tame reading for core U.S. consumer price data was seen lowering the odds of aggressive Federal Reserve interest-rate hikes over the coming months. Higher rates would make the dollar more attractive to foreign investors, but at least some Fed action, probably beginning later this month, has already been priced into the foreign-exchange market. The dollar was down 0.4 percent at $1.2086 per euro and fell 0.3 percent at 110.70 yen per dollar.

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http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38153.3543865741-815235310&siteID=mktw&scid=0&doctype=806&property=&value=&categories=&

U.S. May CPI up surprising 0.6% on food, energy costs

WASHINGTON (CBS.MW) - Higher gas and food prices pushed the U.S. consumer price index up 0.6 percent in May, the fastest gain in more than three years, the Labor Department said Tuesday. The core rate of inflation - which strips out food and energy prices - rose 0.2 percent in May. Economists expected a 0.5 percent gain in the headline CPI and a 0.2 percent increase in the core measure. Headline inflation has risen 3.1 percent in the past 12 months, the fastest gain since June 2001. However, core inflation rates fell to a 1.7 percent year-over-year increase in May from 1.8 percent last month. In May, price increases were muted outside energy and food. Energy costs rose 4.6 percent in May, the most since January. Food prices jumped 0.9 percent, the biggest increase in 14 years.

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Have a Great Day Marketeers!