Dollar Firms as Leading Economic Indicators Eke Out a Small Gain
May 20th, 2008 | By Doug Casey | Category: US Dollar & Forex TradingIn the currency market, the dollar sank in early trading but then firmed up strongly against the euro. Late Monday, the euro was trading at $1.5507 vs. $1.5587 on Friday.
Traders responded positively to the Conference Board’s index of leading economic indicators, which rose for a second straight month—up 0.1%, matching March’s gain—after falling for the five previous months.
“These data certainly reflect a weak economy, but not one in recession,” said Conference Board labor economist Ken Goldstein. The small increases in March and April “could be a signal that the economy may not weaken further.”
“The U.S. dollar rally looked increasingly at risk in overnight trading action. However, the unexpected reaction to this morning’s leading indicators report indicates a willingness to continue buying greenbacks on positive U.S. news,” said Michael Woolfolk, of the Bank of New York Mellon.
But Marc Chandler, currency strategist at Brown Brothers Harriman, disputed that interpretation of the reason for the buck’s rise, saying that, “we suspect it is more a question of positioning.”
Source: Dollar Firms as Leading Economic Indicators Eke Out a Small Gain
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