FOREX-Dollar recovers broadly on weak euro zone, UK data reuters/article/2014/10/14/markets-forex-idUSL2N0S923Y20141014 NEW YORK, Oct 14 (Reuters) - The U.S. dollar recovered against a basket of major currencies on Tuesday after worrying economic data out of the euro zone and Britain underscored the relative health of the U.S. economy. The dollar reversed Mondays losses against the euro after euro zone industrial output and the ZEW indicator of German investor sentiment came in well below forecasts, renewing fears of another technical recession in the euro zone. Weak numbers in Germany are like looking at the foundation of a home and realizing theres some rotten wood, said Douglas Borthwick, managing director at Chapdelaine Foreign Exchange in New York, on the implications of the German data on the euro zone economy. He said the weakness did not bode well for the euro and resulted in traders favoring the dollar. The euro hit an 11-month low against the yen. The concerns over global growth, particularly in Europe, overshadowed worries that the U.S. Federal Reserve would delay its first interest rate hike, even after San Francisco Fed President John Williams told Reuters Tuesday that the central bank would consider delaying a rate hike if inflation started to sustainably drop away from its 2 percent goal. An interest rate hike is expected to boost the dollar by driving investment flows into the U.S. The dollar bounced back from a one-month low against the Japanese yen, while sterling fell against the greenback on data showing a drop in September inflation and a fall in retail sales in the United Kingdom. There is some support for the dollar because people still think the U.S. economy is doing best of all, said Boris Schlossberg, managing director of FX strategy at BK Asset Management in New York. He said, however, that a greater rally in the dollar had likely run out of steam since Fed policymakers did not appear to be in any hurry to raise rates. While the dollar was up against the yen, the global growth concerns limited the safe-haven yens losses. The euro was last down 0.84 percent against the dollar at $1.2645, and down 0.73 percent against the yen at 135.21 yen. The euro hit an 11-month low of 135.05 yen. The dollar was last up 0.11 percent against the yen at 106.96 yen after hitting a one-month low of 106.68 yen earlier in the session. The dollar also recovered against the Swiss franc and was last up 0.73 percent at 0.9548 franc. The dollar index, which measures the greenback against a basket of six major currencies, was last up 0.39 percent at 85.864.
Posted on: Wed, 15 Oct 2014 07:12:46 +0000
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