Dollar Rallies vs. Euro
Jan 5th, 2009 | By Doug Casey | Category: Financial NewsIn the currency market, the dollar rallied against the euro. Late Friday, the euro was trading at $1.3869 vs. $1.4086 on Tuesday.
The buck was buoyed against the euro as the European purchasing managers’ index showed manufacturing activity fell for a seventh consecutive month, to 33.9 in December, from 35.6 in November. The reading was the lowest in the survey’s history.
Any dollar gains, however, were likely capped by more gloomy data on the home front. The Institute for Supply Management reported that its index of manufacturing activity declined to 32.4% in December, from 36.2% in November. It was the fifth straight monthly drop, marked the lowest point in more than 20 years, and was totally counter to economists’ expectations for a rise to 36.3. Readings under 50 indicate contraction in the industry.
“The decline covers the full breadth of manufacturing industries, as none of the industries in the sector report growth at this time,” wrote Norbert Ore, chairman of the ISM.
That caused John Brynjolfsson, the managing director of hedge fund Armored Wolf in Aliso Viejo, California, to write that the report indicates: “Macroeconomically, we’re in a freefall … That’s a complete destruction in industrial production and demand, and this is likely to keep pressure on the commodity sector in general.”
The ISM also said that new orders now have contracted for 13 consecutive months, and are at the lowest level on record, going back to January 1948. Manufacturing payrolls also shrank, as the employment index fell to 29.9% from November’s 34.2%.
Source: Dollar Rallies vs. Euro
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