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Saturday, December 2, 2023

Dollar edged up after sinking to 14-month low

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The dollar recovered in midday trading Tuesday as weak U.S. economic data tempered better-than-expected earnings results from big American companies. The dollar had fallen earlier to a 14-month low in overseas trading against other major currencies.

By midday in New York, the dollar rose to 75.44 against a basket of six currencies that include the euro, yen and pound. Overnight, the dollar had dropped to a 14-month low of 75.105.

The euro fell to $1.4916 by midday in New York from $1.4944 late Monday. Overseas, the euro had peaked at $1.4994, its highest level since August 2008.

The British pound rose to $1.6416 from $1.6370 in New York trading. But the dollar rose to 90.93 Japanese yen from 90.65 yen.

Apple Inc. and Texas Instruments Inc. released quarterly reports that topped most analyst forecasts in the U.S. on Monday afternoon. On Tuesday, chemical maker DuPont and health insurer UnitedHealth Group Inc. reported profit gains, while heavy equipment maker Caterpillar Inc. said its sales will improve next year. United Airlines’ parent company said sales fell 20 percent, but that was better than had been expected.

Meanwhile, the government reported housing construction rose in September, but an indicator of future building — applications for building permits — dropped. Wholesale prices dipped.

That sent stocks lower in midday trading. The dollar tends to trade inversely to stocks. When traders receive better than expected news on the economy or corporate results, they tend to sell the dollar and buy stocks, emerging-market currencies or commodities such as gold and oil, which can earn higher returns than the dollar.

The weakening dollar has raised concerns abroad because it makes it harder for eurozone exporters to sell goods to the U.S., the world’s biggest economy, and to Asian economies pegged to the dollar.

Late Monday, the European Central Bank and the 16 nations that use the euro said they supported a strong dollar, echoing the stance of U.S. officials.

“We very much share that view expressed by the Treasury secretary and we also share the views expressed by (Federal Reserve chairman) Ben Bernanke,” said ECB President Jean-Claude Trichet.

During a speech Monday, Bernanke said the United States is in a “difficult fiscal situation” and that Congress and the White House must find ways to boost confidence in the U.S. economy and the dollar and cut down the record-high budget deficit.

Still, many analysts expect the euro to rise above $1.50, possibly this week.

In other trading, the dollar rose to 1.0151 Swiss francs from 1.0131 late Monday, after sinking as low as 1.0080 overnight, its lowest point against the franc since July 2008.

The dollar also rose to 1.0503 Canadian dollars from 1.0288 after the Bank of Canada held the country’s key interest rate at 0.25 percent and said it would leave it there until the middle of next year.

The Australian dollar also hit a 14-month high against the U.S. currency overnight before moving lower in the morning.

© 2009 Associated Press. Displayed by permission. All rights reserved.

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