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–The Euro...The New World Currency?
Dollar Falls Against Euro
Associated Press
NEW YORK - The dollar dropped to its lowest level against the euro in
almost eight months Monday, extending the sell-off that began Friday and
leading many traders to believe the dollar will fall even further versus
Europe's single currency.
As New York trading wound down, the euro was hovering just above the
psychologically important $1.25 mark, suggesting to many that the euro
has crossed a key technical barrier, which will prompt investors to pile
onto the dollar-bearish bandwagon in the weeks to come.
In late trading in New York, the euro was stronger at $1.2501 from
$1.2480 late Friday. Meanwhile, the dollar was at 109.27 yen, up from
109.19; 1.2301 Swiss francs, down from 1.2328; and 1.2558 Canadian
dollars, up from 1.2518. The pound was lower at $1.7992 from $1.8034.
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The dollar
dropped to its lowest level against the euro in almost eight
months. |
The dollar's move lower Monday was triggered by the release of Treasury
International Capital System flows data, which showed that net foreign
buys of U.S. securities in August were $59 billion, lower than July's
downwardly revised net purchases of $63.1 billion.
The data added to already deep concerns about the sustainability of the
huge U.S. trade and current account deficits. With foreigners buying
fewer U.S. Treasury notes, stocks and other dollar assets, the large
trade deficits will place strong downward pressure on the dollar.
Andy Busch, global foreign exchange strategist at Harris Nesbitt, said
that even though the market was in the mood to seize on any negative
data and drive the dollar lower, the August TICS data was unquestionably
bad for the U.S. economy.
"It's really come off the last couple of months. We're in dangerous
territory ... The U.S. has a big problem with its trade balances," he
said. A weaker dollar "is the only way we can partially address the
trade data."
Still, it remains to be seen whether the dollar's structural problems
posed by U.S. trade imbalances will ultimately push the dollar ever
lower versus the euro.
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