Corporate Earnings put Pressure on US Dollar
Concerns about the state of the United States financial sector sent the U.S. Dollar to near record lows today against the Euro. On Monday, the U.S. Dollar gained slight support after second quarter earnings from Bank of America was better than expected; however, further poor earnings from blue-chip companies such as Amex reinforced corporate stress.
Major currencies are in relatively tight ranges due to the absence of major economic data from the Euro zone and the U.S. until Thursday, when the German Business Morale Index and the Euro-Zone Purchasing Managers Indexes will be released. According to some analysts, while sentiment about the U.S. Dollar remained weak, concerns about the Euro zone economy is preventing the Euro from surging past the $1.60 mark.
On July 22, 2008, at 10:30 GMT, the Euro traded at $1.5921 against the U.S. Dollar, and 169.37¥ against the Yen.
By close of business today, it is expected that shares of financial institutions in the U.S. will come under heavy pressure because of huge losses of $8.8 billion reported by Wachovia, the fourth largest bank in the U.S., for the second quarter.