Dollar Proceeds Higher Against Euro
Jun 9th, 2009 | By Doug Casey | Category: US Dollar & Forex TradingIn the currency market, the dollar gained further ground on the euro. Late Monday, the euro was trading at $1.3883 vs. $1.3968 on Friday.
“The dollar has probably seen its worst levels for a while, and now we can expect a sideways-to-higher trend over the next month,” said Ron Simpson, currency strategist at Action Economics.
With no big numbers due out until tomorrow, traders focused on other factors.
The smaller-than-expected job losses reported on Friday helped reinforce the idea among investors that the U.S. economy will be the “first in, first out” of recession, said Stephen Gallo, head of market analysis at Schneider Foreign Exchange.
However, Gallo added that he’s skeptical of that scenario, while conceding that the dollar could continue to rise in the near term.
In addition, the euro took a hit after Standard & Poor’s downgraded Ireland’s long-term sovereign credit rating to AA from AA+. Ireland’s credit outlook remains negative, S&P said, as the country is burdened by the fiscal costs of supporting its crippled banking system.
“Ireland is in an especially difficult place,” said analysts at Brown Brothers Harriman. “The cost of the financial bailout, coupled with the loss of tax revenue due to the severe contraction and counter-cyclical spending, is proving to be overwhelming.”
And across the Pacific, Japan’s current-account surplus plunged in April, coming in more than 20% below projections. Exports have fallen 40.6% on the year, while imports are down 37.8%.
Source: Dollar Proceeds Higher Against Euro
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