Friday July 25, 2008 - 10:46:13 GMT
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Reuters - www.reuters.com
FOREX NEWS-Dlr retreats, hurt by weaker stocks, higher oil
* Euro up 0.3 percent at $1.5720
* Weaker equities, higher oil hurts risk appetite
* U.S. data weighs on dollar, more to come
(Adds comment, details, updates prices, changes byline))
By Naomi Tajitsu
LONDON, July 25 (Reuters) - The dollar retreated from a
two-week high versus a basket of major currencies on Friday,
knocked by weaker-than-expected U.S. housing and jobs data the
previous session, lower equity markets and higher oil prices.
U.S. jobless claims have jumped and the pace of existing
home sales has tumbled to a 10-year low, data showed on
Thursday, reminding investors of the problems plaguing the
world's largest economy.
A significant recovery in oil prices from a seven-week low
hit on Thursday as well as a financials-led sell off in global
equity markets also weighed on sentiment, dragging down the
dollar and boosting the low-yielding yen and the safe-haven
"We're seeing a reappraisal of the recent dollar strength.
Broad dollar-positive sentiment has been capped on fresh signs
of weakness in U.S. financials," said Lee Hardman, analyst at
"Focus will be on U.S. equities and crude oil prices," he
added, saying that more losses may be in store for the U.S.
The dollar <JPY=> was down 0.1 percent at 107.25 yen by 1008
GMT, having fallen as low as 106.59 yen. The U.S. currency has
retreated from a one-month high of 107.98 yen hit the previous
day according to Reuters data.
The euro added 0.3 percent to $1.5720, but was still roughly
three U.S. cents below a record high set in mid-July <EUR=>.
The single European currency recovered from a two-week low
hit on Thursday after German business sentiment suffered its
biggest drop since September 2001, according to the July Ifo
index, while euro zone PMIs pointed to contraction in both the
services and manufacturing sectors.
On Friday, the euro edged higher, brushing off figures
showing a slowdown in money supply growth [nFAE002362].
Against a basket of six major currencies, the dollar fell
0.4 percent to 72.655, retreating from Thursday's two-week high
A near 1 percent fall in European shares helped to
add selling pressure on the dollar, as did a 0.4 percent rise in
U.S. crude oil prices CLc1 to around $126.00, pulling away
from a seven-week low of $123.50 yen hit on Thursday.
"I can see market participants being hesitant to drive the
dollar higher unless oil prices fall," said Niels Christensen,
FX strategist at Nordea in Copenhagen.
Traders said the dollar was pressured on caution before more
U.S. data later in the day, including new home sales and durable
goods orders for June, as well as a consumer sentiment poll.
"Further USD decline is likely today if the new home sales
matches yesterday's dire existing home sales report," Societe
Generale said in a research note.
However analysts said that the scope for weak U.S. data to
hurt the dollar was limited as a fairly negative U.S. picture is
already priced in, and euro zone economic data has also been
coming in on the weak side.
(Additional reporting by Toni Vorobyova, editing by Stephen
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