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Dollar Rallies, Bonds Mixed |
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Greenback rises, bonds mixed - May. 19, 2005
Page 1 of 2
Dollar rallies, bonds mixed
Greenback rallies after report shows initial jobless claims down sharply, Treasury
prices are mixed.
May 19, 2005: 10:29 AM EDT
NEW YORK (CNN/Money) - The dollar rallied near seven-month highs against the euro
Thursday after the weekly jobless report showed a bigger-than-expected drop last week.
Treasury prices were mixed.
The dollar bought ¥107.45, up from ¥106.82 the previous session, while the euro bought
$1.2620, down from $1.2680 late Wednesday.
The number of Americans filing new claims for unemployment insurance fell 20,000 to 321,000
last week, the government said Thursday, a bigger drop than Wall Street economists had
expected.
"In terms of the jobless claims, the claims were less than expected and that is good for the
economy and that will add some confidence to the belief that the March slowdown was a soft
patch," David Katz, chief investment officer at Matrix Asset Advisors, told Reuters.
The dollar's recent rally, triggered after a strong set of economic reports and a big drop in the
trade deficit, has brought the currency's gains against the euro to almost 7 percent this year.
"On balance, economic data from the U.S. is relatively favorable, compared to what we see
from other parts of the world and this is supporting the dollar," Ian Gunner, head of foreign
exchange research at Mellon Bank in London, told Reuters.
Stronger economic growth could mean higher interest rates, which tend to make the dollar
more attractive to overseas investors. However, Inflation hurts bonds as it erodes the value of
the fixed-income investment.
In bond markets, the benchmark 10-year note edged higher to yield 4.08 percent, little
changed from late Wednesday. The 30-year bond rose 7/32 of a point to 114-15/32 to yield
4.43 percent. Bond prices and yields move in opposite directions.
Prices for the five-year note fell 1/32 of a point to 100-9/32, yielding 3.81 percent, the two-year
note also edged down one tick to 100-1/32, yielding 3.60 percent.
http://cnnmoney.printthis.clickability.com/pt/cpt?action=cpt&title=Greenback+rises%2C+... 5/19/2005
Greenback rises, bonds mixed - May. 19, 2005
Page 2 of 2
-- from staff and wire reports
Click here for bond charts.
Find this article at:
http://money.cnn.com/2005/05/19/markets/bondcenter/bonds/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=Greenback+rises%2C+... 5/19/2005
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