US Dollar Gains against Major Currencies
The U.S. Dollar firmed versus major currencies today due to lower crude oil prices. Crude oil prices fell by almost $10 from a recent record high even though crude oil inventories fell sharply, and renewed tension in the Middle East. However, investors are concerned about further credit market upheaval following stock market losses in Europe and the United States.
The Euro dropped in early trading, after data showed more than expected drops in French industrial production in May, especially in the energy and automobile sectors. Analysts are saying that the data from French manufacturing production is very disappointing which caused the Euro to drop against the U.S. Dollar.
Investors are still concerned about credit market problems as Freddie Mac and Fannie Mae are reported to be experiencing liquidity crisis which will require raising additional capital.
It is expected that the Bank of England will keep interest rates steady at 5% because the economy is facing the double pressure of slow economic growth and rising inflation.
The U.S. Dollar gained 5% against the Yen, and closed at 107.29 Yen, while the Yen dropped 0.2% against the Euro, to close at 168.40 Yen. The Euro fell 0.3% against the Dollar and closed at $1.5698.