US dollar continues up on economic data

Story link: US dollar continues up on economic data

The US dollar was up 0.6 percent to $1.2937 against the euro on Monday, a nine-month high, and an increase of 10.7 percent on the euro since March.

The dollar also rose in relation to sterling, rising 0.5 percent to $1.8020, while gaining 0.9 percent to ¥109.58 in relation to the yen and going up 0.6 percent to SFr1.2768 against the Swiss franc.

Additionally, the South Korean won lost 0.8 percent in relation to the dollar, to Won1,016. The dollar was aided by last week’s comments from US Federal Reserve chairman Alan Greenspan as well as other economic data that all indicate that there will be as many as three more interest rate hikes in the US by the end of the year that will take interest rates to 3.75 percent.

On the other hand, bad political an economic news in the eurozone are leading to expectations of an interest rate cut by the European Central Bank by the end of the year.

The yen, besides losing value in relation to the US dollar, also fell 0.6 percent to ¥83.29 against the Australian dollar. The yen’s problems have been exacerbated by soft inflation data from China, which is generally seen as reducing the pressure on China to revalue its currency.

Back in Europe, the Swedish krona lost 0.6 percent against the euro, to SKr9.2828, a fourteen month low, as well as declining 0.7 percent in relation to Norwegian currency. These declines are in consequence of discussions of a rate cut, predicted to go down by 50 basis points to 1.5 percent next week, by Riksbank.