US Dollar Firms in Light Trading against the Euro
On Monday, July 21, 2008, the U.S. Dollar firmed, only cents away from a record low against the Euro, primarily on renewed investor confidence brought about by the better-than-expected results announced last week by J.P. Morgan, CitiGroup and Wells Fargo; it was also helped by the favorable reception of the Freddie Mac and Fannie Mae rescue plans, which were also announced last week. The U.S. Dollar was further supported by a sharp reduction in oil prices which, at one point last week, was down $18 per barrel.
Tempering investor sentiment, however, is the anticipation of more financial and earnings reports expected out early this week, by Wachovia Bank and Bank of America.
Despite the Euro hitting a high of $1.6038 last week, Tuesday, the strong U.S. bank results announced last week caused the Euro to stage its poorest weekly performance in more than a month; nonetheless, year-to-date, the Euro is nearly 9% higher.
At 07:28 GMT, the Euro traded at $1.5865, up .1% over the previous close. The U.S. Dollar traded at 106.64 Yen, down .3% over the previous close. Among the major currencies, the Pound Sterling was the loser, falling to both the Euro and the U.S. Dollar, the loss attributed to comments by Bank of England’s David Blanchflower, who indicated that the (U.K.) economy was heading towards recession.