Dollar Jumps Slightly
Jul 20th, 2009 | By Doug Casey | Category: US Dollar & Forex TradingIn the currency market, the dollar climbed against the euro. Late Friday, the euro was trading at $1.4099 vs. $1.4142 on Thursday.
Analysts attributed the dollar’s slight rise and thin trading on Friday to apparent mujahideen bombings in Jakarta.
The Associated Press reported that eight people were killed and at least another 50 injured in a pair of powerful blasts. The explosions occurred around the Megan Kunigan business area of the Indonesia capital, where the JW Marriott and Ritz Carlton hotels and some embassies are located.
“A preference for safe-haven assets has been clear in the wake of the two bombings in Indonesia overnight,” said Jane Foley, research director at Forex.com. “The currency moves, however, have been relatively muted,” she said.
The dollar index, which tracks the greenback against a trade-weighted base of six major rivals, was at 79.475, up from 79.222 late Thursday.
In economic news, the Commerce Department reported yesterday that construction of new homes and apartments picked up to the fastest pace in seven months during June.
Housing starts rose 3.6% to a seasonally adjusted annual rate of 582,000, the highest figure since November. Building permits also increased, rising 8.7% to 563,000, the strongest reading since December.
The starts figures for June came in stronger than the 531,000 annual rate expected by economists surveyed by MarketWatch.
Economists said starts had fallen about as far as they could. Now there are some new incentives in the market that are luring back potential buyers.
Analysts were willing to say that starts have hit the bottom, but were more cautious to predict a rebound given the overhang of unsold homes on the market.
“One could interpret this report as somewhat bitter-sweet,” said Millan Mulraine, economics strategist at TD Securities in Toronto.
“On the optimistic side, it appears that residential construction activity may have stabilized…on the other hand, with sales continuing to lag behind the level of building activity by a factor of 200K, this up-tick in construction will likely mean that the inventory of unsold homes could continue to rise,” Mulraine said.
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Doug Casey is a contrarian investor, sought-after public speaker and author of several books. His work "Crisis Investing" held the position of # 1 bestseller on the New York Times list for 26 consecutive weeks. Doug's unusual views on the economy - and just about everything else - have gained a huge following in the investment community, and it certainly helps that his stock recommendations of undervalued junior exploration companies have made his subscribers millions. Now in its 27th year, Doug's monthly newsletter, the International Speculator, is one of the most established and esteemed publications on gold, silver and other natural resource investments. Together with the Casey Energy Speculator, it covers a broad range of carefully selected stocks with the very real potential of double- and triple-digit returns within 12 to 24 months.