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Dollar hits 6-week high on euro, loses ground in quiet trade - Mar. 25, 2005
Page 1 of 2
Dollar hits 6-week high vs. euro
Rally fades in quiet holiday trade, investors look ahead to next week's payrolls report.
March 25, 2005: 10:25 AM EST
NEW YORK (CNN/Money) - The dollar struck a six-week high against the euro and rose
on the yen early Friday, but quiet trading on what was a holiday weekend in many
markets cooled the rally.
The euro bought $1.2953, up from $1.2937 late Thursday. Earlier in the day, the euro was
buying $1.2928, its lowest level since Feb. 14.
The dollar traded at ¥106.36, little changed from ¥106.37 late Thursday. Earlier the dollar had
reached ¥106.53.
There was some debate over whether the greenback buying
would last after the holiday. They rally was sparked by the Federal Reserve's most recent
interest rate hike and policy statements suggesting that it could raise rates more aggressively if
inflation heats up.
Many said that the dollar's roughly 3.5 percent climb against the euro and 2 percent gain
versus the yen in the past week have been driven by investors scurrying to cover short dollar
positions, and hardly constituted a dollar-buying trend.
"The dollar buying we've been seeing ahead of the holiday has been driven by repositioning,
and it's difficult to say whether this is going to continue into next week," Hideaki Furumaya,
forex manager at Trust and Custody Services Bank, told Reuters.
Figures on Wednesday showing core U.S. consumer prices rising at the fastest year-on-year
pace since 2002 added to the possibility of even bigger rate rises.
With inflation on their minds, traders will focus on economic data due out next week,
particularly the March payrolls report, which could shed further light on the outlook for interest
rates.
Economists expect the payrolls data, due next Friday, to show that the economy created
220,000 jobs in March, down from 262,000 in February, which was the biggest gain in four
months.
Next week's schedule also includes the final reading of fourth-quarter gross domestic product
http://cnnmoney.printthis.clickability.com/pt/cpt?action=cpt&title=Dollar+hits+6-week+hi... 3/28/2005
Dollar hits 6-week high on euro, loses ground in quiet trade - Mar. 25, 2005
Page 2 of 2
and the February reading of the PCE index -- one of the Fed's favorite measures of inflation.
For dollar rates click here.
For more on the economy click here.
Find this article at:
http://money.cnn.com/2005/03/25/markets/bondcenter/dollar/index.htm
Check the box to include the list of links referenced in the article.
http://cnnmoney.printthis.clickability.com/pt/cpt?action=cpt&title=Dollar+hits+6-week+hi... 3/28/2005
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Although this information is believed to be correct and from reliable sources, no guarantees are being made to its accuracy. Past performance is not indicative of future results. All trading involves a risk of loss.
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