Dollar rises, supported by cooling risk demand
Oct 22, 2009 Make Money Online
By Naomi Tajitsu
LONDON (Reuters) – The dollar rose broadly on Thursday, rebounding from 14-month lows against the euro and a currency basket as a slide in global share prices cooled risk demand and put the brakes on a rally in higher-risk currencies.
European shares .FTEU3 fell around 1.6 percent, tracking Asian and U.S. stocks lower on some disappointment over corporate earnings and prompting some investors to book profits on the euro’s rise above $1.50 on Wednesday.
The dollar was also supported by Chinese GDP figures. While showing economic growth quickened, the data sparked selling in higher-yielding currencies, including the Australian dollar, as some in the market had expected even stronger expansion.
Cooling risk demand benefited the dollar on Thursday, but analysts said its downtrend remained intact as optimism about the global economy leads some investors to sell the U.S. currency for riskier assets.
At the same time U.S. interest rates are seen remaining low for many months, adding to the dollar’s yield disadvantage as other central banks consider tightening monetary policy. Read the rest of this entry »
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