Dollar Falls
Jul 10th, 2009 | By Doug Casey | Category: US Dollar & Forex TradingIn the currency market, the dollar fell against the euro. Late Thursday, the euro was trading at $1.4036 vs. $1.3882 on Wednesday.
“The correlation between risk aversion and currencies has decreased over recent weeks. We continue to expect risk aversion to play an important role in driving currencies, but it will not be as dominant a factor as it has been over the past year,” said analysts at Calyon.
“Our expectations of improved risk appetite over the coming months point to further U.S. dollar weakness,” they added in a research note.
On the economic front, it’s still looking pretty gloomy out there.
While first-time claims for state unemployment benefits fell in the latest weekly data (after seasonal adjustment) continuing claims hit a record high, the Labor Department reported yesterday.
The number of initial claims in the week ending July 4th fell 52,000 to 565,000 – the lowest level since January. But this is no reason to jump for joy.
The drop in initial claims is not a “green shoot,” forecasting a return to healthy economic growth, wrote Dan Greenhaus of the market strategy group at Miller Tabak in a research note.
“We must not lose sight of the fact that 565,000 is an absolutely terrible reading for weekly claims and, in fact, the highest reading in the most recent recession was 517,000 following Sept. 11,” Greenhaus wrote.
Thanks for putting things into perspective Mr. Greenhaus.
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