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Dollar at 9 month low vs Euro. Selling pressures increase

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pscot Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Sep-16-09 04:10 PM
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Dollar at 9 month low vs Euro. Selling pressures increase

NEW YORK (Dow Jones)-- The dollar gained to an intraday high against the euro on a slight dip in U.S. stocks following a positive open.

The euro fell to $1.4647.

However, the euro continues to flirt with a fresh one-year high against the U.S. unit. Analysts say that if stocks stay in the positive Wednesday, the euro could break through $1.4720.

Meanwhile, the dollar remains down versus the yen, as risk appetite remains supported. Overnight, the euro climbed to a nine-month high for the seventh consecutive trading session, $1.4715, while the dollar fell to a seven-month low of Y90.12. Wednesday morning in New York, the euro was at $1.4656 from $1.4667 late Tuesday, according to EBS via CQG. The dollar was at Y90.65 from Y91.06. The euro was at Y132.88 from Y133.60. The U.K. pound was at $1.6458 from $1.6495, while the dollar was at CHF1.0363 from CHF1.0340. Still, analysts say the dollar remains broadly weaker after two weeks of selling off. Trader demand is up for greater yields from the ultra low interest rate on the U.S. unit.

The cost of borrowing longer-term U.S. dollars in the London interbank market continued its downward trend Wednesday, with the key three-month rate marking its lowest level since the British Bankers' Association first introduced its Libor fixings back in 1986. This retains the dollar's use as the financing currency of choice for now.Traditionally, the yen has been a lower-yielding currency.

"The yen's negative correlation to risk appetite has been definitively broken," said analysts at Credit Suisse. To boot, the Nikkei and other media reported Wednesday that the incoming Japanese Finance Minister Hirohisa Fujii said that the recent foreign exchange market "is not fluctuating wildly" and therefore doesn't call for an intervention.

" adds weight to the argument that a major dollar crisis may be on hand as the usual sources of support for the greenback disappear," said Geoffrey Yu, a currency strategist at UBS in London.
Essentially, the probability of a broad and sharper dollar fall have increased now that the previously long-held assumption that Japan would prevent a strong yen has disappeared.

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rollingrock Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Sep-16-09 04:14 PM
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1. Confusing headline
Either your headline is wrong or the article is wrong
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pscot Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Sep-16-09 04:18 PM
Response to Reply #1
2. The Euro is at a 9 month high,
Edited on Wed Sep-16-09 04:19 PM by pscot
ergo the buck is at a 9 month low. Where's the problem? The real news is deeper in the article and concerns the strength of the Japanese yen, which has been a key dollar support.
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pokercat999 Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Sep-16-09 08:05 PM
Response to Original message
3. Paradise switches from dollars to Euros....nt
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