Buck Finishes Higher Against Euro
Jan 7th, 2009 | By Doug Casey | Category: Financial NewsIn the currency market, the dollar lost most of its early gains but still finished slightly higher against the euro. Late Tuesday, the euro was trading at $1.3529 vs. $1.3588 on Monday.
The buck declined after the release of minutes of the Federal Open Market Committee’s mid-December meeting, which showed members seeing an increasing risk of depression and deflation..
The text of the minutes revealed that some participants envisioned “the distinct possibility of a prolonged contraction, although that was not judged to be the most likely outcome.” However, with inflationary pressures likely to dissipate, “some members saw significant risks that inflation could decline and persist for a time at uncomfortably low levels.”
David Watt, senior currency strategist at RBC Capital Markets, noted that the minutes “did not indicate any optimism on either the FOMC or the Board of Governors that better times were at hand.”
In hard data, the Commerce Department reported that U.S. factory shipments plunged a record 5.3% in November, with orders for U.S. factory-made goods falling 4.6% in the month. That was twice the 2.3% decline expected by economists.
And the National Association of Realtors said its pending home resale index fell off 4% in November, to 82.3, from 85.7 in October. It’s now at its lowest level since inception in 2001.
Source: Buck Finishes Higher Against Euro
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