Dollar up against euro after ECB chief s support call.
NEW YORK: The US dollar rose Monday against the euro, helped in part by the European central bank chief Jean-Claude Trichet s support for a strong greenback, traders said.
The euro, which jumped recently to a year high against the greenback, was changing hands for 1.4612 euros at 2100 GMT, compared with 1.4686 dollars in New York late Friday.
"The dollar rally continues and evidence continues to mount that the recent US dollar low is significant," said Jamie Saettele, a senior currency strategist of Forex Capital Markets. Saettele forecast that in the short term, the euro s "bearish target" was 1.4450 dollars.
The greenback fell slightly against the Japanese currency, to 89.58 yen from 89.60 on Friday as the Asian unit remained the best performing currency against the dollar.
The dollar rally against most other currencies was primarily attributed to comments from ECB President Trichet, who said that he supports a strong dollar policy, said Kathy Lien, director of currency research at Global Forex Trading.
"This was nothing new because he previously indicated that he believes the dollar should be strong as well, but with dollar short positions still at extreme levels, it apparently was enough to trigger a broad based rally in the greenback," she said.
Lien said the ECB was "not incredibly uncomfortable" with the strength of the euro, adding, "Therefore do not expect the dollar rally to last."
The dollar rally came as US stocks staged a rally on the back of large company mergers and acquisitions, in what analysts saw as a break from recent tradition. The safe haven dollar is usually under pressure when risk appetite improves as investors seek to put their money into riskier assets such as stocks.
On Monday, Wall Street shares jumped and the dollar also rose.Eoe1/4A[yen] This is what makes today s price action in the currency market particularly mind boggling because the dollar actually strengthened on a day when stocks rose by the strongest amount in five weeks," Lien said.
David Song, currency analyst with Forex Capital Markets, said consumer confidence in the United States was expected to improve for the second consecutive month in September, with the rebound "likely to stoke increased demands for the dollar as the outlook for future growth improves.Eoe1/4Eo
In late New York trade, the dollar rose to 1.0327 Swiss francs from 1.0270 on Friday.The pound fell to 1.5878 dollars from 1.5951.
Muscat Press and Publishing House SAOC 2009
Provided by Syndigate.info an Albawaba.com company
|Printer friendly Cite/link Email Feedback|
|Publication:||Times of Oman (Muscat, Oman)|
|Date:||Sep 29, 2009|
|Previous Article:||Delta gets financing to tackle debt.|
|Next Article:||Voters give British PM little credit on economy: Poll.|