Dollar edges ahead amid equities downturn
Source ; Msn.com

The dollar rose slightly against the euro on Friday as anxious investors closely monitored the state of global stock markets following recent turbulent trade.


The euro fell to 1.3155 dollars in early European trading, from 1.3184 dollars late in New York on Thursday. The European unit also stood at 154.69 yen, down from 154.99 yen.

The dollar firmed to 117.59 yen, from 117.53 yen on Thursday.

European equities slipped on Friday following a week of volatility that was sparked by concerns of a slowing American economy and fears of a speculative bubble in the Chinese stock market.

"Today's data and events calendar is light," said currency analysts at Dutch banking giant ABN Amro in a note to clients.

"Key foreign exchange market direction however will likely depend upon the performance of global equities and bonds: either via extending the anti-carry trade trend to boost the yen and the Swiss franc, or its reverse if equities stage a surprise end of week rebound."

Yen-selling pressure emerged after the Japanese government said that the core consumer index for the Tokyo area was unchanged in February from a year earlier, when economists had forecast a 0.1 percent rise.

The yen has climbed this week as dealers unwound the risky carry trades due to recent falls on global stock markets, analysts said.

Carry trade means investors borrow in Japan, whose interest rates are the lowest among major economies, to invest in higher-yielding areas, and is seen as a key reason for the weakness of the yen, which boosts exporter earnings.

The US dollar meanwhile gained ground against the euro after Thursday's Institute of Supply Management (ISM) report on the US manufacturing sector showed a surprisingly strong gain.

"The failure of equities to convincingly rebound, despite a strong US ISM survey and solid Japan labour and industrial production reports, leaves the near term outlook (for markets) still looking shaky," said ABN Amro analysts.

Commerzbank analyst Gavin Friend added: "Overall, we expect the dollar to remain on the defensive, but given the data did not confirm the market's worst fears on growth, the recent bout of weakness should stabilise."

Dealers were also reacting to reports that former Federal Reserve chief Alan Greenspan had softened his earlier comments, saying that he does not think a slowdown in the US economy is "probable", only "possible".

The euro was changing hands at 1.3155 dollars, against 1.3184 dollars on Thursday, 154.69 yen (154.99), 0.6742 pounds (0.6731) and 1.6114 Swiss francs (1.6110).

The dollar stood at 117.59 yen (117.53) and 1.2248 Swiss francs (1.2216).

The pound was being traded at 1.9511 dollars (1.9580).

On the London Bullion Market, the price of gold slid to 661.95 dollars per ounce, from 670.40 dollars late on Thursday.

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Don't quote anymore posts like this...removed by dzevahidin

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[edited]
sorry for quoting such stupid post..
Will inform any mod if i find any posts like this then

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