Wednesday, 15 October 2014 01:14
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Reuters: The dollar recovered its footing in Europe on Tuesday after sinking to its lowest in a month against the yen amid deepening worries over global growth and an equities sell-off that is gathering pace.
A messy few days on markets – New York shares dived again on Monday – have highlighted flaws in the arguments of those lobbying for a significantly stronger dollar against the euro, yen and other major currencies.
Treasury yields, whose rise has been an important driver of the U.S. currency’s meteoric gains since July, have fallen as investors sought a safe haven for money pulled out of company shares.
In contrast, concern that poor or non-existent growth will worsen the debt problems of Italy and other southern European states has raised yields and made government bonds there look more attractive. The dollar index fell as much as 1% in U.S. trading on Monday.Against the euro, buyers coming in for the dollar pushed the single currency half a percent lower. Dealers said large option expiries would keep trade at around $1.27. The euro was worth $1.2694 in early European deals. Sterling took another hit overnight from an unexpected fall in the BRC indicator of retail sales, down 2.1% year on year compared with expectations of a 1.0% rise.
