Dollar Higher vs. Euro
Jan 16th, 2009 | By Doug Casey | Category: Financial NewsIn the currency market, the dollar moved higher against the euro again. Late Thursday, the euro was trading at $1.3149 vs. $1.3176 on Wednesday.
Though there were some poor economic numbers out of the US, traders’ eyes were looking across the pond, where the European Central Bank cut interest rates a half-point to 2%.
Members of the ECB’s rate-setting Governing Council meet February 5, but the next “important rendezvous” won’t occur until the panel’s March 5 meeting, President Jean-Claude Trichet told reporters, adding that “we didn’t say that it was now the limit and we wouldn’t move any more.”
While Trichet offered his standard warning that policy makers never “pre-commit” to a rate decision, reading between the lines the remarks were a “clear rate signal,” says Aurelio Maccario, chief euro-zone economist at UniCredit MIB in Milan.
In Maccario’s view, Trichet was not only indicateing a February pause but effectively delivering a “pre-announcement of a March move.”
“The ECB is still behind the curve,” said Henrik Gullber, a currency strategist at Deutsche Bank (NYSE:DB) in London. It will “have to go below 1 percent.”
Meanwhile, at home, initial jobless claims rose by 54,000 for the week ended January 10, to 524,000, the Labor Department said. “The experience of previous deep recessions suggests claims are nowhere near their peak, and we doubt that peak will be reached before the fall of this year,” said Ian Shepherdson, of High Frequency Economics. He expects a peak of 750,000.
Source: Dollar Higher vs. Euro
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