Tuesday November 11, 2008 - 23:14:57 GMT
Share This Story
Reuters - www.reuters.com
FOREX NEWS-Dollar rises to 2-week highs on global growth worries
* Dollar rises to two-week high vs basket of currencies
* Dollar, yen underpinned by global growth worries
* Sterling hits record low vs euro
* For up-to-the-minute market news, please click FXNews
(Recasts, adds comments, changes byline)
By Vivianne Rodrigues
NEW YORK, Nov 11 (Reuters) - The U.S. dollar rallied to a
two-week high against a basket of currencies on Tuesday as
worries about a deteriorating global economy prompted investors
to shun riskier assets and flock to the safety of the
A sell-off in stock markets worldwide further dampened
investors' appetite for risk, boosting demand for the dollar
and the Japanese yen. A break of the recent trading ranges
further exacerbated selling pressure on the euro, analysts
"The outlook for global growth and for most equities
remains dismal," said Jessica Hoversen, a fixed-income and
currency analyst at MF Global in Chicago. "The U.S. dollar is
benefiting from diminished risk appetite. It is still seen as a
In late trading in New York, the ICE Futures U.S. dollar
index, which tracks the value of the greenback against a basket
of six currencies, was up 1.4 percent at 87.159 .DXY after
rising as high as 87.268, the strongest level since Oct. 28.
The euro <EUR=> also fell earlier to a two-week low at
$1.2508 and last traded down 1.6 percent at $1.2528.
U.S. stocks tumbled as production cuts at aluminum maker
Alcoa, fears of a cash drain at automaker General Motors and
signs the Chinese economy is faltering heightened fears of a
global economic slump.
"The overall driver is just the slowing global outlook and
the dollar generally does a bit better in that environment, not
to mention that the selling is focusing on the euro zone, UK
and Australia, all of which are facing incoming weak data that
likely will continue to highlight downside risks in their
economies," said Brian Dolan, head of currency research at
Forex.com in Bedminster, New Jersey.
The yen traded broadly higher as worries over slowing
growth kept up the pressure on carry trades, in which
low-yielding currencies like the Japanese currency are used to
buy assets in higher-yielding ones.
"With the depressing news on the global economy continuing
to spill out, the U.S. dollar and the Japanese yen rally," said
Andrew Busch, global FX strategist at BMO Capital Markets in
Chicago. "The recession is spreading as the credit crisis winds
blow the radioactive waste further and further throughout the
The dollar last traded down 0.3 percent at 97.74 yen <JPY=>
and the euro fell 1.8 percent to 122.51 yen <EURJPY=>.
Higher-yielding currencies tumbled, with the Australian
dollar trading 1.5 percent lower at US$0.6586 <AUD=>.
The euro came under pressure despite a better-than-expected
reading in a key German indicator survey ECON, weighed down
by steep losses in crude oil and U.S. stocks.
"For the currency market, the decline in oil prices is
bullish for the U.S. dollar and Japanese yen, but bearish for
the euro," said Kathy Lien, director of currency research at
GFT Forex in New York. "Since the beginning of the year, there
has been a 70 percent positive correlation between the
euro/dollar and the price of oil."
In other trading, sterling was battered as it fell to its
lowest in 12 years on a trade-weighted basis and hit a record
low against the euro on concerns that the UK economy will
suffer even more than the euro zone.
The euro earlier hit a record high against sterling of
82.14 pence, according to Reuters data <EURGBP=> while the
pound fell 1.3 percent against the dollar to $1.5404 <GBP=>.
(Additional reporting by Wanfeng Zhou; Editing by Chizu
Forex Trading News
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."