U.S. dollar drops to 10-week low against the euro

U.S. dollar drops to 10-week low against the euro
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First Published: Fri, Mar 16 2007. 06 04 AM IST
Updated: Fri, Mar 16 2007. 06 04 AM IST
The dollar declined to a 10-week low against the euro on 16 March 2007 as a U.S. report due today is likely to show confidence among consumers fell to the lowest in six months, raising concern economic growth will slow.
The U.S. currency headed for the biggest weekly loss since December as the yield premium investors earn on benchmark two-year treasuries over similar-maturity German bonds this week fell to the smallest in more than two years. The dollar also was set for a losing week against the yen.
“There’s doubts about how strong the U.S. economy is,” said Michael Thomas, head of economics and strategy at ICAP Australia Ltd. in Sydney. “The numbers out of the U.S. we’re seeing are on average a little bit weaker, which generally means weakness for the dollar.”
The U.S. currency dropped to $1.3279 per euro at 9:18 a.m. in Tokyo, the lowest since 3 January 2007, from $1.3238 in New York a day before.It also fell to 117.23 yen from 118.33 a week ago. The dollar will decline to $1.33 per euro and 115 yen in the next month, Thomas forecast.
The euro has strengthened 1.3% this week as the yield differential between benchmark two-year U.S. and German bonds narrowed to 0.5841 percentage point on March 13, the smallest since December 2004.
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First Published: Fri, Mar 16 2007. 06 04 AM IST
More Topics: Money Matters | Global Markets |