Dollar Weak Against Euro
Jun 2nd, 2009 | By Doug Casey | Category: US Dollar & Forex TradingIn the currency market, the dollar prolonged its slide against the euro. Late Monday, the euro was trading at $1.417 vs. $1.4126 on Friday.
“What we’ve seen is a continued rally in risky assets — equities, commodities and emerging markets,” said Michael Woolfolk, senior currency strategist at the Bank of New York Mellon (NYSE:BK).
It’s “the green-shoots rally that has really perpetuated the dollar sell-off in recent weeks,” Woolfolk added. “It’s not being driven by fundamentals but market sentiment.”
The buck was strong as long as economic turmoil and fear dominated market thinking, with the currency seen as a safe haven. Now, however, the appetite for riskier investments is on the rise “across the board,” notes Kenneth Broux, of Lloyds TSB in London. “It certainly looks like there is a great acceleration in recent trends.”
Among the day’s numbers, the Institute of Supply Management’s national manufacturing index rose to 42.8 in May from 40.1 in April. That bettered economists’ expectations for a reading of 42, but anything below 50 indicates that industry is still contracting.
Meanwhile, the Commerce Department reported a 1.1% rise in disposable incomes in April, which mostly went into savings rather than spending. The personal savings rate jumped to 5.7% in April, a 14-year high.
Real consumer spending fell 0.1%, the second consecutive decline and the 8th decline in the past 11 months. Inflation was relatively tame in April, with consumer prices rising 0.1%, and core prices — which exclude food and energy – up 0.3%.
Source: Dollar Weak Against Euro
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