Dollar Returns Early Gains
Sep 4th, 2008 | By Doug Casey | Category: Financial News, US Dollar & Forex TradingIn the currency market, the dollar was unchanged against the euro. Late Wednesday, the euro was trading at $1.4508 vs. $1.4507 on Tuesday. Earlier in the day, the euro had fallen to a seven-month low of $1.4384. The buck also hit a one-year high of $1.0748 against the loonie before easing, and rose to $1.7776 vs. the British pound, which was over $2 in July.
The dollar got a boost early with the release of a Commerce Department report showing that factory orders rose by 1.3% in July, much better than the 0.8% increase forecast by economists.
“The dollar picked up a bit following the better factory orders data, though reaction has been muted so far,” wrote currency analysts at Action Economics. “Some squaring of long dollar positions appears to be under way for the time being.”
And the buck gave back its early gains after the Fed’s Beige Book report on economic conditions came out. “Many [Fed districts] described business conditions as ‘weak,’ ’soft,’ or ’subdued’,” the Beige Book said.
According to the Fed, the service sector is slowing, the factory sector is weak, the real estate sector shows no sign of bottoming out, and lending activity is subdued.
Even one of the strongest recent sectors—orders from overseas—shows signs of slowing, and as a result, companies are reining in hiring plans, the report found.
Source: Dollar returns early gains - Beige Book confirms weak economy.
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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.