| The dollar suffered sharp falls in currency trading markets on Thursday, hit by reports of weak US business activity and a benign inflation picture.
The euro rose 0.7 per cent against the dollar to $1.3247 by late afternoon in New York after data from Chicago purchasing managers indicated that business activity in the Midwest unexpectedly fell last month.
Sterling Pound rose to its highest level against the dollar since its ejection from the European Exchange Rate Mechanism in September 1992 as UK house prices continued to show rapid growth. The pound rose to $1.9699 before edging back to $1.9658, almost 1 per cent up on the day. The yen also gained, up 0.5 per cent against the dollar to Y115.77.
A report revealed that inflation in US personal consumption expenditure excluding food and energy, the Federal Reserve’s preferred inflation benchmark, held steady in October at 2.4 per cent year-on-year. Data suggested further inflation-fighting interest rate rises by the Fed, which could support the dollar, were even less likely to be needed.
The slide in the dollar was briefly arrested on Wednesday following an upward revision to official estimates of US third-quarter growth.
Michael Woolfolk, foreign exchange strategist at Bank of New York, said: “[The] personal income and spending report and Chicago PMI were the one-two punch that knocked the dollar back on the ropes, leaving little doubt over near-term direction in the beleaguered greenback.” |
Just when we think the dollar exchange rate is so low that it can not get any worse, currency exchange rates prove us wrong. On Thursday, US dollar has hit the lowest aganst EURO, and Yen in a long while, but worst of all it plunged 14-year low against British pound.
My thoughts are still worth "my two cents", while Brits keep offering "a penny for your thoughts". Damn Brits are now making 1 cent profit from the operation.
