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Dollar Falls From One Week High As Stocks Drop
Dollar Falls From One Week High As Stocks Drop
The dollar fell from a one-week high against the euro as concern credit market losses will deepen pushed U.S. stocks even further. The Standard & Poor's 500 Index dropped 1.3 percent after increasing as much as 0.8 percent. Fannie Mae and Freddie Mac, the two largest U.S. providers of financing for home loans, tumbled on speculation banks were unloading more mortgage bonds. JPMorgan Chase & Co. and Citigroup Inc. retreated.
The dollar rose earlier versus the euro on speculation U.S. officials will try to stem gains in oil prices as the G-8 summit gets under way in Japan. Leaders from Canada, France, Germany, Italy, Japan, Russia, the U.K. and the U.S. are meeting for three days. Central bankers aren't attending the meeting. Bush said yesterday on the first day of his five-day trip to Japan that the U.S. 'believes in a strong-dollar policy.' The U.S. economy remains fundamentally strong even as growth has slowed, Bush said at a news conference with Japanese Prime Minister Yasuo Fukuda in Tokyo. EUR/USD currently trading at $1.5747 as 5:57 pm, GMT 7th of July.
The pound fell against the dollar and the euro and bonds rose after a government report showed U.K. manufacturing contracted more than predicted in May, deepening concern the economy will tip into a recession. The U.K. currency slipped to its lowest level versus the dollar in almost two weeks as investors scaled back bets the Bank of England will boost interest rates when it meets July 10. The Office for National Statistics said today output declined 0.5 percent in May from April. GBP/USD currently trading at $1.9785 as of 6:02 pm, GMT.
Canada's dollar strengthened for the first time in three days as traders speculated inflation may accelerate in the world's eighth-largest economy. The Canadian dollar gained versus 15 of the 16 most-traded currencies, paring last week's 0.9 percent decline. Consumer prices rose 1 percent in May, the biggest one-month jump since January 1991. A central bank survey showed the outlook for future sales growth rose to the highest in a year during the second quarter. 'Canadian businesses expect prices to increase at a greater pace,' said Carlos Leitao, chief economist at Laurentian Bank Securities Inc. in Montreal. 'The markets are saying that perhaps the Bank of Canada would increase rates sooner rather than later.' USD/CAD currently trading at 1.0174 as 6:05 pm, GMT.
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