Dollar reverses earlier gains

Published: 16 Aug at 9 AM Tags: Euro, Dollar,

Yesterday’s dollar rally has been reversed because it is now questionable whether the Federal Reserve will reel in its stimulus programme as soon as had been previously expected. The greenback had risen on the back of positive jobless figures on Thursday only to lose the gains after industrial and manufacturing data proved disappointing.

The dollar is up 0.2 per cent against the yen at 97.56 yen. On Thursday the greenback traded as high as 98.64 yen. The euro is down to $1.33344 after hitting a two-week low yesterday of $1.3205.

The drop in the dollar may also have been caused by an increase in the price of gold. The precious metal and the greenback usually behave inversely to each other. At one point on Thursday gold was trading at $1,318.81 per ounce before rising as high as $1,366.69 per ounce on Friday.

In New Zealand a strong earthquake close to Wellington saw a slight fall in the Kiwi dollar. Although there are not yet any reports of major damage the Kiwi ended down by a third of a cent at $0.8067.

Strong retail figures in the UK saw the pound gain 0.9 per cent against its US counterpart to hit $1.5640. Positive data could persuade the Bank of England to push up interest rates.