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Daily World Currencies News from London
Friday 30th of July 2010
July 15, 2008

USD weaker on Bernanke comments

Story link: USD weaker on Bernanke comments

USD weaker on Bernanke comments

The US dollar was weaker Tuesday against most major currencies after Federal Reserve chairman Ben Bernanke told the US Senate Banking Committee that risks have increased in relation to both growth and inflation.

Also affecting the dollar were separate reports from the Commerce Department and the Labor Department showing that retail sales gained just 0.1 percent in June and producer prices were up 9.2 percent in the year ending in June.

Still, there is some expectation that the greenback could strengthen in the near term as the economic slowdown spreads beyond the United States to other regions globally.

In early afternoon trade in New York, the dollar traded at $1.5918 to the euro after going to a record low of $1.6083 earlier in the session, while it took ¥104.8300 to buy a dollar after the Bank of Japan kept interest rates at 0.5 percent for the time being.

The euro had problems of its own as new data from the ZEW Center for European Economic Research showed German investor confidence at a record low at minus 63.9 in July, more of a decline than had been anticipated, making it less likely that the European Central Bank will raise interest rates again this year.

The pound was stronger versus both the euro and the dollar on a new report showing that consumer price inflation was at 3.8 percent in June, its highest in eleven years and its second month in a row above the 3 percent goal set by the UK government.

At nearly 1 p.m. in New York, the pound traded at 79.46p to the euro and it took $2.0033 to buy a pound.

The Canadian dollar also gained on its US counterpart after the Bank of Canada left interest rates at 3 percent, trading at C$1.0002 to the greenback on concerns that persistent credit market problems in the United States will spread to Canada.

Meanwhile, the Swiss franc traded at SFr1.0092 to the US dollar on less enthusiasm for risky carry trades, which are sometimes financed with the low-yielding franc.

 

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