Dollar Plumbs New Lows Vs Euro (Wed 12-31)

[RamboLiberal]

http://news.yahoo.com/news?tmpl=story2&cid=568&u=/nm/20031231/bs_nm/markets_forex_dc_25&printer=1

The dollar hit an all-time low against the euro on Wednesday, shrugging off U.S. economic data as concerns about possible attacks in the United States during New Year celebrations intensified selling pressure.

A weekly jobless claims report showed new applications for U.S. state jobless benefits hit the lowest level in nearly three years. But the seemingly upbeat report of 339,000 new claims last week failed to support the greenback.

Currency traders are "routinely ignoring positive information, choosing instead to highlight negative information as an excuse to sell the dollar," said Michael Woolfolk, senior currency strategist with the Bank of New York. He noted that the greenback's downward momentum was accentuated by thin markets.

The dollar's performance in recent months has become effectively divorced from that of fairly robust U.S. economic reports because the widening U.S. current account deficit -- the broadest measure of the nation's global trade -- and low U.S. interest rates have punished the greenback.

[htuttle]

1. "routinely ignoring positive information,..."

"...choosing instead to highlight negative information as an excuse to sell the dollar."

Whaaa! They aren't listening to our propaganda!

[alfredo]

2. Looks like they don't see us as a good investment

but how is the dollar doing in china.

[fedsron2us]

3. Why would any sane person want to hold their capital

in a currency that has lost 30% of its value in the past three years and that pays less than 1% interest on cash deposits. Factor out this devaluation from the recovery in US stock prices and the the turn around in the economy looks like more and more of a chimera.