Feb 12, 2007

Dollar Dips After Chicago PMI Falls Below 50

NEW YORK (MarketWatch) -- The dollar fell slightly against major European currencies Wednesday, erasing early gains after a U.S. economic report showed business activity in the Chicago contracted this month.

The Chicago Purchasing Managers Index fell to 48.8 in January from 51.6 in December, suggesting a contraction in the regional manufacturing sector. Economists polled by MarketWatch were expecting a reading of 52. A reading above 50 would signal growth.

But Brian Dolan, director of research at Forex.com, a division of Gain Capital, cautioned that "manufacturing accounts for an ever smaller portion of U.S. economic activity so the Chicago PMI should not have much of a lasting effect, even though it's below the 50 boom/bust line."

In New York trading, the euro stood at $1.2984, compared with $1.2965 late Tuesday. The dollar was quoted at 121.42 yen, compared with 121.59 yen.

The British pound traded at $1.9539, compared with $1.9622. The dollar changed hands at 1.2497 Swiss francs, compared with 1.2519 francs.

The euro fetched 157.55 yen, compared with 157.66 yen.

The Federal Open Market Committee, the Fed's policy-setting panel, is widely expected to leave overnight borrowing costs unchanged at 5.25%. Traders will be closely watching the accompanying statement for clues on future rate moves. The rate announcement is due at 2:15 p.m. Eastern.

Ashraf Laidi, chief foreign-exchange analyst at CMC Markets in New York, said that "there has been much talk about today's FOMC statement being more hawkish than the December statement, shedding more focus on the prospects of a return to trend growth later this year rather than emphasizing the risks to inflation.

"The dollar may especially rally if the Fed removes the use of the word 'substantial' in its description of the slowdown in housing market," he said.

Economy surges 3.5%

Earlier, the dollar gained against European currencies after a government report showed the U.S. economy rose at a faster-than-expected pace in the fourth quarter.

The U.S. economy shook off a summer slump and surged ahead at a greater-than-expected 3.5% annual growth rate in the fourth quarter, the Commerce Department estimated. The 3.5% growth rate was much stronger than the 2% recorded in the third quarter, and handily beat the 3% expected by economists.

Separately, a report from Automatic Data Processing Inc. showed U.S. private-sector employment rose by 152,000 in January. Adding an estimated 15,000 or so additional government jobs that aren't included in the ADP index, the ADP report suggests nonfarm payrolls likely rose by about 167,000 in January. The Labor Department will report nonfarm payrolls data Friday morning at 8:30 a.m. Eastern. Economists polled by MarketWatch are expecting payrolls rose by 150,000.

Yen steadies on G-7 speculation

Elsewhere, the yen rallied overnight before surrendering gains amid rising speculation that the Europeans will press the Japanese authorities to halt the yen's slide at the upcoming meeting of Group of Seven finance ministers in Germany on Feb. 9-10.

Boris Schlossberg, senior currency strategist at FXCM, said the yen saw "some very mild carry trade liquidation" after German Finance Minister Peer Steinbrueck stated that a strong euro remains a risk, "triggering off speculation that euro-zone officials are not going to sit idly by at the upcoming G-7 meeting if the euro/yen rate continues to hover near the 158.00 level."

Carry trades refer to the practice of speculators borrowing yen at low costs and reinvesting in higher-yielding currencies and assets.

Elsewhere, U.S. Treasury Secretary Henry Paulson said the U.S. is "actively pressing" China for more foreign-exchange flexibility. He said that while China has made some progress on the yuan issue, the pace has not been fast enough.

::source: marketwatch.com

Related Posts


Anonymous said...

Download mp3 songs, Video songs, Wallpapers or Full Movie

(Bollywood, Hollywood, Telugu and Tamil Movies)

Download mp3 songs

Download or Watch Online Video

Download Full Movie

Download Wallpapers of Actress

Download Movie Wallpapers

Download mp3 songs, Video songs, Wallpapers or Full Movie

Latest Tpoics of this site :

Download Bhoothnath Video Songs

Download Meet Bill Hollywood Movie(2008)

Download Baby Mama movie(2008)

Download Love Songs Bollywood movie (2008)

Download Pandi Songs (2008)

Watch or Download Akku movie (2008)

Download What Happens In Vegas movie(2008)

Download War, Inc. movie(2008)

Download my mom's new boyfriend movie (2008)

Download chennai superkings songs

Download Aayutham Seivom songs (2008)

Download Speed Racer Movie (2008)

Download Khushboo songs (2008)

Download Bhootnath movie (2008)

Download sonal chauhan Actress Wallpapers

Download Katherine Heigl Wallpapers

Download ileana Wallpapers

Download Anamika Video songs (2008)

Download Anamika movie(2008)

Watch Sirf Video songs (2008)

Watch Jalsa Video Songs (2008)

Download Jalsa wallpapers (2008)

Watch Kantri Video Songs (2008)

Download Rang Rasiya Wallpapers (2008)

Download Ankit, Pallavi & Friends Songs

Download Anamika Songs (2008)

Download Ghatothkach songs (2008)

Download Jalsa (2008) telugu movie

Download Kantri Wallpapers (2008)

Download Raat Gayi Baat Gayi wallpapers (2008)

Download Don Muthuswami video songs (2008)

Download Don Muthuswami Songs (2008)

Download Dhoom Dadakka Video Songs (2008)

Download Hastey Hastey (2008) Wallpapers

Download Dhoom Dadakka (2008) songs

Download The Awakening (2008) Songs

Download Hastey Hastey Video Songs

Download Anushka Shetty Wallpapers

Download Kalidasu Telugu Movie (2008)

Download Too Hot Too Cool (2008) Songs, IPL POP

Download Mr White Mr Black movie (2008)

Download Hastey Hastey Songs (2008)

Download Shamur Shardana Songs - Pop Album

Download Sirf (2008) Movie

Kuruvi Video Songs Download

Download Tashan movie (2008)

Download Katrina kaif Wallpapers

Download Aashayein Wallpapers

Download The Number 23 (2007) movie

Download Vaana Telugu songs

Post a Comment