Dollar Keeps On Truckin’
Dec 2nd, 2008 | By Doug Casey | Category: Financial NewsIn the currency market, the dollar moved sharply higher against the euro for the second straight day. Late Monday, the euro was trading at $1.261 vs. $1.2874 on Friday.
“There is no question that the meltdown in the equity market single-handedly triggered the sell-off in the currency market today,” said Kathy Lien, director of currency research at GFT. “The flight to safety has led to repatriation back into U.S. dollars even though there is still more trouble ahead for the U.S. economy.”
The gloomy news came in bunches yesterday. The Institute for Supply Management reported that its manufacturing index fell to 36.2% in November from 38.9% in October, its lowest reading since May 1982 and worse than economists’ expectations for a drop to 37%. Readings under 50% indicate most firms reported worsening conditions.
China’s manufacturing activity in November, as compiled by brokerage CLSA Asia-Pacific Markets, marked the sharpest drop in the history of the survey, which began in 2004. Indexes also dropped in the UK and eurozone.
Meanwhile, a committee of economists at the private National Bureau of Economic Research said the U.S. economy entered a recession in December 2007. The government, academics and the private sector often defer to the NBER’s judgments about recessions.
The committee does not define a recession as two consecutive quarterly declines in gross domestic product; rather, it examines quarterly data along with four key monthly economic indicators: employment, incomes, industrial output and sales.
Employment and incomes peaked in December of last year, industrial output peaked this January, and sales peaked in June, the NBER committee said.
Source: Dollar Keeps On Truckin’
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