Dollar up as Fed sees recovery gaining traction
NEW YORK — The dollar was slightly higher Wednesday after the Federal Reserve said regional economic activity has generally improved and consumer spending is stronger, even as employment and commercial real…
NEW YORK — The dollar was slightly higher Wednesday after the Federal Reserve said regional economic activity has generally improved and consumer spending is stronger, even as employment and commercial real estate remain weak.Investors also digested a mixed reading on the labor market and awaited the European Central Bank's last rate-setting meeting of the year on Thursday.The 16-nation euro dipped to $1.5036 in late New York trading from $1.5096 late Tuesday, while the British pound slipped to $1.6640 from $1.6641. The dollar rose to 87.43 Japanese yen from 86.65 yen.On Wednesday, Japan's prime minister and its central bank chief vowed to step up cooperation in their effort to pull the nation out of deflation, a day after the central bank said it would further ease monetary policy in order to combat a surging yen and dropping prices.The dollar had fallen to a 14-year low of 84.81 yen on Friday. Japanese officials then had mentioned intervention as a possibility in order to weaken the yen. But this week's action — plans to offer about 10 trillion yen ($115.8 billion) in short-term loans to commercial banks to boost liquidity and maintaining the key interest rate at 0.1 percent — could help weaken the yen without resorting to selling the currency, analysts said.The Bank of Japan also said it was supplying 1 trillion yen ($11.4 billion) into the short-term money market in a one-time injection."If the Japanese government remains concerned about the currency but wish to avoid intervention, the plausible step is to push the (Bank of Japan) toward debasement-style quantitative easing," said UBS analyst Patrick Ley.Stock markets have also rebounded this week after worries subsided that Dubai's debt problems would cause more turmoil in the financial system. That means the safe-haven dollar gave back most of last week's gains as investors once again moved into riskier, higher-yielding assets such as emerging-market currencies, equities and commodities.Gold hit a new record Wednesday above $1,218 an o
last modification 2009-12-02 22:30:04
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