Forex Market Update: Dollar Down Against Euro and Yen
The euro added gains vis-à-vis the U.S. dollar to climb to its session high on Friday after a data provided by the New York Fed showed that the pace of manufacturing activities in the New York State fell in March.
The index fell to 9.24 in March from 10.04 in February, according to the New York Federal Reserve. Economists were expecting a reading of 10.
The euro climbed as high as $1.3098, gaining 0.6 percent on the day, from $1.3058 before the data was released.
The pound sterling also recovered against a broadly weaker dollar to trade again above $1.51 on Friday after Bank of England Governor Mervyn King showed concerns over the abrupt slide in the currency.
Meanwhile, the U.S. dollar extended losses against the yen of Friday during early trade as the U.S. unit was weighed down by broad losses.
A data provided Reuters showed that the dollar fell as low as 95.80 yen and last traded at 95.89 yen, slipping 0.2 percent on the day.
Traders said that although the U.S. Consumer Price Index (CPI) rose for the month of February mainly due to increase in gasoline a price, inflation was not yet a concern. As a result, the Federal Reserve will be disinclined to halt its ongoing $85 billion worth monthly bond purchase program, said traders, according to Reuters. Since the Fed’s quantitative easing entails rampant currency printing, it increases the supply of dollars in the system which in turn undermines the greenback.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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