Dollar recoups losses
Sunday, 2 September 2007
NEW YORK, Sept (AFP): The dollar rebounded from early losses yesterday as investors parsed comments by Federal Reserve chairman Ben Bernanke and saw a reduced sense of urgency in cutting US interest rates.
The euro fetched 1.3623 dollars, compared with 1.3628 dollars in New York late Thursday. Earlier in the day it had reached a high of 1.3719 dollars, its highest level since August 9.
The dollar was trading at 115.76 yen, from 115.86 yen Thursday.
In late New York trade, the dollar rose to 1.2087 Swiss francs from 1.2044 Thursday.
The pound was being traded at 2.0170 dollars after 2.0117.
Bernanke, in his first speech since turmoil gripped financial markets at the beginning of the month, reassured that the US central bank was ready to smooth problems in the credit markets.
The Federal Reserve will act "to limit the adverse effects" of the mortgage crisis on the economy, Bernanke said.
Analysts said the comments reinforced expectations that the Fed will cut its benchmark lending rate by 25 basis points to 5.0 per cent at its next meeting in September.
But Michael Woolfolk at Bank of New York Mellon said the dollar rebounded from early losses as Bernanke's comments were digested, and traders saw no urgency to trim the federal funds rate.
As well as Bernanke's speech, jittery investors were soothed by plans announced by US President George W. Bush to help stretched home owners to keep hold of their homes amid rising defaults and foreclosures.
"Analysts expect that the moves by the White House to relieve the stress in the US mortgage market will be well received," said John Noonan at Thomson IFR Markets.
The dollar showed little reaction to a series of economic indicators that were generally better than expected, including on personal income and spending, and factory orders. Analysts said these reports reflected the period before the credit crunch hit global financial markets.
The euro fetched 1.3623 dollars, compared with 1.3628 dollars in New York late Thursday. Earlier in the day it had reached a high of 1.3719 dollars, its highest level since August 9.
The dollar was trading at 115.76 yen, from 115.86 yen Thursday.
In late New York trade, the dollar rose to 1.2087 Swiss francs from 1.2044 Thursday.
The pound was being traded at 2.0170 dollars after 2.0117.
Bernanke, in his first speech since turmoil gripped financial markets at the beginning of the month, reassured that the US central bank was ready to smooth problems in the credit markets.
The Federal Reserve will act "to limit the adverse effects" of the mortgage crisis on the economy, Bernanke said.
Analysts said the comments reinforced expectations that the Fed will cut its benchmark lending rate by 25 basis points to 5.0 per cent at its next meeting in September.
But Michael Woolfolk at Bank of New York Mellon said the dollar rebounded from early losses as Bernanke's comments were digested, and traders saw no urgency to trim the federal funds rate.
As well as Bernanke's speech, jittery investors were soothed by plans announced by US President George W. Bush to help stretched home owners to keep hold of their homes amid rising defaults and foreclosures.
"Analysts expect that the moves by the White House to relieve the stress in the US mortgage market will be well received," said John Noonan at Thomson IFR Markets.
The dollar showed little reaction to a series of economic indicators that were generally better than expected, including on personal income and spending, and factory orders. Analysts said these reports reflected the period before the credit crunch hit global financial markets.