Dollar Strengthens as U.S. Growth Accelerates and Yields Rise
Published:
31 July 2003 y., Thursday
The dollar rose against the euro and yen in New York trading as the Federal Reserve said U.S. growth is accelerating. Ten-year Treasury note yields near the highest in a year also fueled gains for the currency.
The beige book, the Fed's anecdotal report on the economy, found ``signs that the pace of economic activity increased a notch during June and the first half of July.'' Reports tomorrow and Friday may show strength in employment and manufacturing, according to a Bloomberg News survey of economists.
The dollar strengthened to $1.1349 per euro at 5 p.m. in New York from $1.1442 yesterday. It has gained against the 12-nation European currency in six of the past nine weeks, paring its decline on the year to 7.5 percent.
The euro, which reached a record high of $1.1933 in May, ``has probably overshot a bit, just as it undershot two years ago,'' when it fell as low as 83.52 U.S. cents, Niall Fitzgerald, co-chairman of Unilever, the No. 1 maker of household products, said in a televised interview with Bloomberg.
The dollar also advanced against the Japanese currency, to 120.25 yen from 119.93.
Expectations low interest rates, tax cuts and a weaker dollar are fueling growth may boost the dollar by spurring foreign investors to buy U.S. assets. The U.S. requires about $1.5 billion a day of foreign investment to offset its trade deficit or the dollar will lose value.
Šaltinis:
Bloomberg
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