Dollar Strengthens Against Euro
Dec 10th, 2008 | By Doug Casey | Category: Financial NewsIn the currency market, the dollar pushed higher vs. the euro. Late Tuesday, the euro was trading at $1.2861 vs. $1.2943 on Monday.
There was little in the way of hard data to drive the market yesterday. The day’s only significant number was a report from the National Association of Realtors, showing that sales contracts on previously owned U.S. homes fell 0.7% in October, as compared with September.
The euro’s losses were capped as Germany’s closely-watched ZEW economic sentiment indicator unexpectedly rose to -45.2 from -53.5 in November. Economists’ expectations were for a drop to -55.
However, the December reading remained well below the historical average of +26.8, offering traders scant room for optimism going forward. Joerg Radeke, an economist at London’s Center for Economic and Business Research said the rebound “is likely to be only a temporary correction.”
Also yesterday, the Bank of Canada cut its benchmark interest rate more than expected, reducing the overnight rate by 75 basis points to 1.50% because of the “weakening outlook for growth and inflation.”
As most analysts were projecting a shallower rate cut of 50 basis points, the loonie wound up taking a 1.5% hit against the buck, dropping to just over 79 cents.
Source: Dollar Strengthens Against Euro
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