Dollar holds ground after Citigroup earnings report
Sunday, 20 July 2008
NEW YORK, July 19 (AFP): The dollar held firm yesterday amid news that US banking giant Citigroup, hard-hit by a sharp downturn in the US housing market, posted a smaller than expected quarterly loss.
The euro was quoted at 1.5846 dollars at 2100 GMT from 1.5850 dollars late Thursday in New York.
The dollar meanwhile firmed to 106.95 yen from 106.37 on Thursday.
In late New York trade, the dollar stood at 1.0223 Swiss francs from 1.0197 Thursday.
The pound was at 1.990 dollars after 2.0014.
The news from Citigroup, one of the biggest US banks, helped calm jitters about the health of the financial sector in the world's largest economy.
The bank posted a 2.495-billion-dollar quarterly loss on more hefty real estate write-offs in results that were not as bad as had been feared.
The loss, amounting to 54 cents a share, was somewhat better than anticipated on Wall Street, where analysts had been expecting a deficit of 61 cents a share.
"Several other US banks have reported better than expected second-quarter earnings, relieving some of the worst concerns about the US financial markets and contributing to yesterday's strong equity market performance and dollar short covering," said Hilary Love at PNC Bank.
"A drop in oil prices also helped the US dollar."
As well as injecting fresh impetus into the dollar, the results saw stock markets move into positive territory and European government bonds hit session lows, with financial sector sentiment soothed slightly by some forecast-beating earnings this week.
Meanwhile, the yen has been under pressure on concerns for the outlook for the Japanese economy and hints that the Bank of Japan is more worried about gross domestic product (GDP) growth than inflation.
"Certainly, Japanese economic trends and developments at the BoJ would appear to point to the yen's continued rejection by the foreign exchange market," said Neil Mellor, currency strategist at Bank of New York Mellon.
"Both the government and BoJ have sharply curtailed their GDP forecasts for the current financial year and the minutes of the last meeting of the BoJ board appear to show a growing consensus for a greater emphasis upon downside risks to growth," he added.
The euro was quoted at 1.5846 dollars at 2100 GMT from 1.5850 dollars late Thursday in New York.
The dollar meanwhile firmed to 106.95 yen from 106.37 on Thursday.
In late New York trade, the dollar stood at 1.0223 Swiss francs from 1.0197 Thursday.
The pound was at 1.990 dollars after 2.0014.
The news from Citigroup, one of the biggest US banks, helped calm jitters about the health of the financial sector in the world's largest economy.
The bank posted a 2.495-billion-dollar quarterly loss on more hefty real estate write-offs in results that were not as bad as had been feared.
The loss, amounting to 54 cents a share, was somewhat better than anticipated on Wall Street, where analysts had been expecting a deficit of 61 cents a share.
"Several other US banks have reported better than expected second-quarter earnings, relieving some of the worst concerns about the US financial markets and contributing to yesterday's strong equity market performance and dollar short covering," said Hilary Love at PNC Bank.
"A drop in oil prices also helped the US dollar."
As well as injecting fresh impetus into the dollar, the results saw stock markets move into positive territory and European government bonds hit session lows, with financial sector sentiment soothed slightly by some forecast-beating earnings this week.
Meanwhile, the yen has been under pressure on concerns for the outlook for the Japanese economy and hints that the Bank of Japan is more worried about gross domestic product (GDP) growth than inflation.
"Certainly, Japanese economic trends and developments at the BoJ would appear to point to the yen's continued rejection by the foreign exchange market," said Neil Mellor, currency strategist at Bank of New York Mellon.
"Both the government and BoJ have sharply curtailed their GDP forecasts for the current financial year and the minutes of the last meeting of the BoJ board appear to show a growing consensus for a greater emphasis upon downside risks to growth," he added.