Financial and Business News

Sudden growth of US Dollar

The US dollar got more expensive against European currencies after reports on consumer spending, durable goods orders and sales of new homes in the U.S. bordered highly negative picture of the current state of the country's economy and limited appetite for risk, provoked by the recovery of economic team of newly elected President Barak Obama and the new government plan to support mortgage lending.
Deepening recession in the U.S. will prompt investors to abandon the highly currencies and to repatriate funds to offset the increased cost of risk.
Two hours after the start of the session the U.S. markets with U.S. currency got more expensive with 1.62 percent to 1.2854 dollars for euros after yesterday is thrown down to 1.3080 dollars for euros, its lowest level since 5th November. The growth of US dollar by 21 percent against the single currency by the end of July onwards, after investors to set it as a traditional refuge of the crisis, a freezing of credit markets and collapse of the shares have forced U.S. companies to repatriate funds.
Over the past five days, however, U.S. money become cheaper by 3.8 percent against the euro. Today, with a view that the threshold of 1.2840 dollars for euros was crossed can be expected to test at 1.2800 dollars for euros, which if it will pass signals to reverse trend from last week. British pound lose places and got cheaper with 1.62 percent after today, the national statistical office in London reported consumption decreased by 0.2 percent in the third quarter of the year, which is the biggest decrease since 1995. Sterling has lost 23 percent of its value against the dollar this year.
Yesterday Governors of the British Central Bank Mervin King said that the reduction in the price of pounds is positive for the country's economy because it helps rebalance and exports.
The index of the New York Exchange, which recognizes the movement of the dollar against the euro, yen, pounds, Canadian dollar, Swiss franc and Swedish krona, rose to 1.056 percent, to 85.90 points. The Japanese currency poevtinyava by 0.16 percent to 95.3800 yen to the dollar after growed during the day to 94.84 yen for the dollar.

Labels: Financial News

posted by Zoritza Petrova @ 1:25 PM