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Currencies Updates

Safe-haven dollar higher on consumer, economy data

11/24/09 11:09 EST

NEW YORK -The dollar ticked higher Tuesday as a survey signaled the continued anxiety of U.S. consumers and the government dialed down its reading of third-quarter economic growth.

The euro will not likely be able to push much above $1.50 this week, said Steven Pearson, currency strategist at Bank of America Merrill Lynch. He expects the safe-haven dollar to get a boost from more weak U.S. economic data and from traders' cutting back on risky bets as 2009 winds down.

The euro touched $1.5001 on Monday, its highest point since Nov. 16.

The 16-nation euro slipped to $1.4958 from $1.4973 late Monday in New York. Meanwhile, the British pound dropped to $1.6560 from $1.6621, but the dollar slid to 88.44 Japanese yen from 89.02 yen.

The dollar was also higher against the New Zealand and Australian dollars, which analysts use as barometers of traders' appetite for risky currency bets.

On Tuesday, the Conference Board, a private research group, said its Consumer Confidence Index rose to 49.5 this month from 48.7 in October. That's an improvement, especially from a record low of 25.3 in February, but not by much. It takes a reading above 90 to signal that the economy is on solid footing. A level above 100 implies strong growth.

Moreover, the government said gross domestic product grew at a 2.8 percent pace from July to September, less than its preliminary 3.5 percent estimate last month. Weaker readings on consumer spending and commercial real estate helped tamp down the government's growth estimate, as did a bigger-than-expected drag from the trade deficit.

The lower reading and weak consumer confidence put a damper on stocks Tuesday morning, with the Dow Jones industrials dropping 0.5 percent, and helped push up the dollar.

Investors see safety in the greenback and its access to the Treasury market. Short-term Treasurys are considered one of the world's most liquid and secure investments.

Investors are also keeping an eye out for minutes from the Federal Reserve's interest-rate meeting earlier this month, expected at 2 p.m. ET. The minutes will likely revolve around an exit strategy to monetary stimulus measures before the threat of inflation rises, said Mizuho Securities analyst Patrick Phalon. At the Fed's Nov. 3-4 meeting, it said the key interest rate would likely stay at "exceptionally low levels" for an "extended period."

The current record-low interest rate at a range near zero has weighed down the dollar as investors transfer funds to where they can earn better returns.

In other trading Tuesday morning, the greenback edged up to 1.0098 Swiss francs from 1.0093 francs late Monday, and rose to 1.0595 Canadian dollars from 1.0553.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
COMMENTS ( 31 )
Page 1 of 7 1 2 3 4 5 6 7 Next >>
DKJAW12
6:48PM Nov 19 2009 
Take a look at this I found. You can get a 4 day free trial for a trading system that works with Forex, Futures, Stocks, Bonds and Commodities. Just go to http://forex-currencyexchange.com and click the top left link.
REPLY RATING
(0 RATINGS)
 
HrrPa9
11:47AM Oct 29 2009 
HBaldo there in lies the question. We continue this assinine attempt to control the intractable with the elected/appointed best and brightest. It never works and never will. So much of U.S. profits remain overseas that such transfers as happens tend to be of quantitative amounts that currency valuations become rocky at best. Small timers can only act as trailers. We find at closer examination most politicians are already quite wealthy. Their pursuits remain vain attempts at self agrandisement. The moral and ethical reasons our founder's had has been replaced by such vanity that effective representation and governing by rational decision making has been reduced to a snickering event.
REPLY RATING
(1 RATINGS)
 
HBaldo
4:21PM Oct 22 2009 
Yes, what to do! The Fed attempted market operations in the 80's but it became evident that the market was so big that it was soon realized that intervention to control the exchange rate of such a massive economy was impossible. What is driving the Euro/$ rate are market forces and many other conditions such as capital flight to and from the US. There are probably people out there who may have an understanding of the relative importance of the significant variables at different times and are benefiting from the decline of the Dollar. However, their knowledge is price sensitive information they are not going to share with world. Unfortunately those individuals will not work for the Fed or the Treasury for many good reasons, compensation probably being one of them. A really knowledgeable trader will receive compensation no government official could ever receive. It appears that even the government actions to regulate foreign exchange related derivatives used for hedging purposes will make it even more difficult for corporations to shield themselves from foreign adverse exchange fluctuations.

Thus, media talk about the government’s failure to step in and force a desired Euro/$ rate is really no more than an expression of faith on the omnipotent power of the government. Given the serious dislocations of the world economy from the Fed keeping domestic rates too low for too long and contributing to the real estate bubble is an indication that all of the government’s economists together simply cannot match the performance of many private sector business analysts. What amazes me to no end is that the journalists completely ignore the Fed/Treasury’s statements in the 80’s that the foreign exchange market for US Dollars is so large as to be beyond control by the government authorities.
REPLY RATING
(2 RATINGS)
 
HBaldo
4:21PM Oct 22 2009 
Yes, what to do! The Fed attempted market operations in the 80's but it became evident that the market was so big that it was soon realized that intervention to control the exchange rate of such a massive economy was impossible. What is driving the Euro/$ rate are market forces and many other conditions such as capital flight to and from the US. There are probably people out there who may have an understanding of the relative importance of the significant variables at different times and are benefiting from the decline of the Dollar. However, their knowledge is price sensitive information they are not going to share with world. Unfortunately those individuals will not work for the Fed or the Treasury for many good reasons, compensation probably being one of them. A really knowledgeable trader will receive compensation no government official could ever receive. It appears that even the government actions to regulate foreign exchange related derivatives used for hedging purposes will make it even more difficult for corporations to shield themselves from foreign adverse exchange fluctuations.

Thus, media talk about the government’s failure to step in and force a desired Euro/$ rate is really no more than an expression of faith on the omnipotent power of the government. Given the serious dislocations of the world economy from the Fed keeping domestic rates too low for too long and contributing to the real estate bubble is an indication that all of the government’s economists together simply cannot match the performance of many private sector business analysts. What amazes me to no end is that the journalists completely ignore the Fed/Treasury’s statements in the 80’s that the foreign exchange market for US Dollars is so large as to be beyond control by the government authorities.
REPLY RATING
(0 RATINGS)
 
LGBAILEY
7:58PM Oct 21 2009 
for any foreign exchange conversion try xe.com. It is the best....
REPLY RATING
(0 RATINGS)
 
Page 1 of 7 1 2 3 4 5 6 7 Next >>
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