Dollar Clings To Recent Gains Versus Euro
The dollar held onto its strong gains from the previous week in quiet dealing Monday morning in New York, supported by lingering concerns about the global economy and slumping stocks.
With no significant economic reports to be released on Monday, there is little to soothe jitters brought on by debt problems and in Europe and the sluggish jobs market here in the US.
Last week, the dollar skyrocketed to its highest levels in almost nine months against the euro and sterling. Even with stocks looking like they will stabilize, risk aversion is likely to prevent the European currencies from making a meaningful comeback against the lower-yielding dollar and yen today.
The dollar was at 1.3650 against the euro, staying near Friday’s 8-month high of 1.3594. The buck has risen more than 15 cents since early December versus the euro amid questions about how the European Union will deal with serious debt problems faced by Greece and Portugal.
Results of a key survey showed that investor sentiment in the Eurozone unexpectedly dropped for the first time in seven months.
The index for Eurozone investor sentiment for February plunged to minus 8.2 from January’s minus 3.7, the Sentix research group said.
The dollar touched a new 8-month high of 1.5533 versus the sterling, and was little changed approaching mid-morning.
Against the yen, the dollar remained near 89.30 in choppy trading. While the dollar has become favored against the euro and sterling, the yen has emerged above the greenback as an even more fashionable safe haven play.
With crude oil prices remaining depressed, the dollar has firmed up against the petro-linked loonie. Monday morning, the dollar was at C$1.0709, as traders geared up for Canada Mortgage and Housing’s report on housing starts in January. Economists expect 180,000 starts on an annual basis, up from 174,500 the previous month.
Looking ahead, the Commerce Department is due to release its wholesale inventories report at 10 AM ET Tuesday. Economists expect wholesale inventories at the end of December to show a 0.6% increase.
trade gap data for December is due out at 8:30 AM ET the next day. Economists estimate that the trade gap narrowed to $35 billion in the month. The trade gap measures the difference between imports and exports of both tangible goods and services.
