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Euro Hits Record Against Dollar |
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Written by Administrator
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Nov 25, 2004 at 11:51 PM |
The euro hit new highs against the dollar on Wednesday, squeezing exporter margins and capping share gains in Europe but propping up euro zone government debt after a disappointing Bund auction.
Volatile data showing U.S. durable goods orders slipping by 0.4 percent in October against an expected 0.5 percent rise had little effect on markets, although they made discouraging reading for investors hoping for more U.S.-led economic growth in 2005.
The impact was tempered by an upwardly revised 0.9 percent gain in September and by weekly U.S. jobless claims data, which showed a drop of 9,000 to 323,000.
"Even though durables was down, on a three-month rolling average it still has a pretty decent pace... As for claims, if this is a real number, it tells us the employment situation is getting stronger," Bob MacIntosh, chief economist, Eaton Vance Management Inc. in Boston.
U.S. stock index futures indicated slight opening gains on Wall Street as benchmark crude oil prices pulled back further below $49 a barrel before weekly inventories data at 1530 GMT.
The FTSE Eurofirst 300 index of leading European shares was broadly flat at just over 1,024 points.
Euro zone government bond futures were broadly flat, as expectations for weaker German inflation and the strong euro helped offset the disappointment of a poorly received 8-billion-euro
German bond auction.
Benchmark 10-year bonds yielded around 3.79 percent.
The yen and other Asian currencies hovered near recent lows, despite talk of possible central bank intervention to stem the dollar's slide.
"With markets thin over Thanksgiving you can't rule (intervention) out," Elizabeth Miller, an analyst at Redtower Research said, referring to Thursday's U.S. holiday.
The euro bought $1.3155, having earlier strengthened to as high $1.3167, and the dollar changed hands for around 102.80 yen.
JAWBONING
Earlier a senior Japanese Finance Ministry official said the dollar was out of line with the economic fundamentals, words which officials have used in the past before intervening. The South Korean government urged firms to curtail dollar sales.
German Chancellor Gerhard Schroeder said he was worried the euro's rise could harm Germany's key export sector and European Central Bank Governing Council member Jaime Caruana said it was affecting external demand.
With Wall Street set for a holiday-thinned session the focus shifted to the University of Michigan's consumer sentiment survey due at around 1445 GMT.
Dollar-denominated spot gold prices hovered around the $449 per troy ounce mark having put on more than $20 in November alone as the dollar tumbled.
Bank earnings helped to keep European benchmarks on an even keel after Benelux group Fortis raised its forecast for 2004 net operating profit by 10 percent and Anglo Irish Bank posted a forecast-beating 45 percent rise in annual profit.
But shares in Swiss-based global employment agency Adecco fell 2.3 percent after it posted a flat net profit for the third quarter.
In Tokyo, the Nikkei average added 0.21 percent, with banks and shipping stocks in favour on improving earnings prospects.
U.S. Treasury prices drifted within a tight range as the market repositioned before Thanksgiving on Thursday, with the U.S. bond market set to close early and 10-year yields at around 4.19 percent.(reuters) |
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Last Updated ( Nov 26, 2004 at 12:46 AM )
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