by Freddie Mooche
Laptop Battery The U.S. dollar continued its gain against the euro Monday, pushing the euro below $1.28 for the first time in three months as currency markets became bullish on Bush's budget cuts.
The nominal bilateral dollar to euro exchange is the exchange rate that attracts the most attention. Notwithstanding the comparative importance of euro to US dollar bilateral trade links, trade with the UK is, to some extent, more important for the Euro zone than is trade with the US. The dollar and the euro have a strong predisposition to run together in the very short run, but sometimes there can be significant discrepancies. The very strong appreciation of the dollar against the euro in 2003 is one example of these discrepancies.
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The latest downturn in the dollar against the Euro could may very well have further room to run, according to analysts.
Laptop Computers Feb 7, 2005 (AXcess News) New York - The U.S. dollar continued its gain against the euro Monday, pushing the euro below $1.28 for the first time in three months as currency markets became bullish on Bush's budget cuts.The dollar was also helped by Federal Reserve Chairman Alan Greenspan who spoke to finance ministers in London last week at the group of seven (G-7) richest nations meeting. Greenspan had told finance ministers there that the United States would correct its huge budget deficit. The euro dropped to US$1.2785 in late European trading - its first time under US$1.28 since Nov. 5, after President Bush delivered his $2.57 trillion dollar budget to congress Monday.
Since the market is constantly moving, there are always trading opportunities, whether a currency is strengthening or weakening in relation to another currency. When you trade currencies, they literally work against each other. USD declines for example, it is because the U.S. dollar gets stronger against the Euro and vice versa. So, USD will decline (i.e. Euro will weaken versus the dollar), you would sell EUR now and then later you buy Euro back at a lower price and take your profits. USD appreciates.
Laptop Computer On Friday, the euro traded at US$1.2878. The British pound traded down at US$1.8619 from US$1.8755 and the dollar climbed against the Japanese yen to $104.52 from $104.03. Comments made by Greenspan Friday made currency traders believe that the dollar did not have to fall in order to correct the U.S. budget deficit.The dollar was also helped by comments made at the G-7 meeting by European Central Bank president Jean-Claude Trichet who cautioned China over tieing its currency to the dollar.
Yesterday, actively traded currencies. The JPY declined to 166.74 per euro, and may fall to 167.50 per euro today. Australia's dollar strengthened 1 percent against the JPY while New Zealand's currency gained 2%. In addition, yesterday saw Japan's index of leading economic indicators published. The index dove to zero for the month of September after a mark of 27.3 in August. The index hit zero for the first time since December 1997.
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Notebooks The EU central bank president said that China should untie its currency from the dollar, accusing China of undervaluing its currency by as much as 40% through U.S. dollar ties.
Lenovo Thursday, Russia said it was switching to a basket of euro and dollars to back its currency instead of tieing the Ruble to just dollars due to the dollar's unstable market price and the huge U.S. budget deficit.AXcess News will be reporting on any new market trends related to this story. Members should watch their in-box for late breaking news. If you're not a member, consider joining now. Members get the latest business news, commentaries and stock picks delivered right to their in-box.
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