Dollar Gains on Euro
Sep 3rd, 2008 | By Doug Casey | Category: Financial News, US Dollar & Forex TradingIn the currency market, the dollar rose against the euro. Late Tuesday, the euro was trading at $1.4507 vs. $1.4696 on Friday. Earlier in the day, the euro had fallen to a fresh six-month low of $1.4465.
The dollar gave back some of its gains after a report that manufacturing firms cut back on activity slightly in August, suggesting caution on their part as the outlook for demand remains cloudy.
The Institute for Supply Management index inched lower to 49.9% in August, from 50% in July. That was just shy of the 50% number expected by economists, and represents the lowest reading since May. Readings below 50 indicate that more firms are contracting than growing.
Exports have held up the sector, analysts say.
Meanwhile, the euro is clearly struggling. “Since mid-July, the decline in the oil price and growing signs of deterioration in the European economy [and elsewhere outside the U.S.] were the major drivers for the [common currency’s] decline,” said strategists at KBC Markets in Brussels.
“Since mid-August, the [euro] correction shifted into a lower gear, but yesterday’s price action indicates that the dollar is still in the driver’s seat,” they added.
Source: Dollar gains on euro - Deteriorating Eurozone economy cited.
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