US dollar, sterling stronger

Story link: US dollar, sterling stronger

The US dollar was slightly stronger on Tuesday as negative conditions surrounding the aftermath of Hurricane Katrina began to ease slightly. Oil prices pulled back a bit as European nations released supplies to help the US and production began again at some Gulf of Mexico oil platforms and some of the less damaged refineries along the Gulf Coast began to come back online.

There was also positive news for the dollar in the Institute of Supply Management’s non-manufacturing index, which was up from 60.5 in July to 65 in August even though analysts had expected a decline.

The US dollar gained 0.4 percent to $1.2491 in relation to the euro and also was up by 0.4 percent to ¥109.59 against yen. The greenback was barely changed in relation to sterling at $1.8428.

Sterling was stronger as well, on data showing manufacturing output up for the 4th straight month in August, making another UK rate cut unlikely when the Bank of England’s monetary policy committee meets tomorrow. This increase in the index came even though output was down in the mining and quarrying sector.

Mergers and acquisitions news was also sterling-positive in light of a possible all-cash offer, said to be worth £10.5 billion, for Scottish Power from Eon of Germany.

Sterling gained 0.4 percent to £0.6777 in relation to the euro, and it also was up 0.4 percent against the yen, to ¥201.95.