The dollar headed for its worst week against the euro - feb - 23, 2005
Dear Crowne Gold Clients,
“This is a very interesting article on how easily the dollar changes in today’s market place.”
Sean Trainor, President of Crowne Gold, Inc. www.crowne-gold.com
By Taizo Hirose
Bloomberg News Service
Friday, February 18, 2005
TOKYO -- The dollar headed for its worst week in two months
against the euro in Asia after Federal Reserve Chairman Alan
Greenspan declined to signal an acceleration in interest-rate
Greenspan said interest rates are low, echoing what minutes
from the Fed's Dec. 14 meeting released Jan. 4 said. The
minutes that said interest rates were "below the level"
needed to slow inflation.
To convince people of buying more dollars, "you needed to get
Greenspan to suggest that the pace of tightening would be
greater than what's already priced in," said Harvinder Kalirai,
chief market analyst in Sydney at State Street Corp., which
manages more than $1.2 trillion of assets as the world's largest
custodian. "He didn't do that."
Against the euro, the dollar traded at $1.3073 at 8:16 a.m. in
Tokyo from $1.3070 late yesterday, according to electronic
currency-dealing system EBS. The U.S. currency is down
1.6 percent on the week, headed for the first weekly drop in five
and the biggest since the week ended Dec. 24. It was also at
105.51 yen from 105.54.
Greenspan told Congress that U.S. interest rates remain "fairly
low" after six increases since June. The Fed's 2.5 percent
benchmark is now a half-point higher than the European Central
Bank's rate, the most since March 2001.
"My thought regarding the U.S. economy is that momentum is
being lost, growth is peaked, and surprises in 2005 will be on
the downside in both growth and inflation," Kalirai said. "We'll
see the dollar resume a primary bear trend."
The Conference Board said the decline in its gauge of the
economy's likely performance over the next three to six months
dropped in January for the first time in three months.
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