Will the weak US economy diminish the hopes for a Dollar recovery?
*Financial Times, by Robert Cookson, March 25, 2008
“Dollar rally fades as US growth worries return
The dollar ended a four-day rally on Tuesday, falling across the board on resurgent pessimism about the US economy.
The dollar had rallied in the run-up to the Easter break as profit-taking in commodity markets saw investors return to cash.
But that ended yesterday, with growing scepticism about the chances of a sustained recovery.
‘We remain cautious on the economic outlook for the US and downward pressure on the prices of mortgage-backed securities is still in place,’ said Geoffrey Yu, currency strategist at UBS.
The dollar eased closer to the $2 mark against the pound. Sterling rose 0.5 per cent to $1.9971.
‘A convincing move through these levels would suggest the dollar bears are re-asserting their dominance and would lend support to arguments that the recent bounce was largely technical in nature,’ said Marc Chandler, currency strategist at Brown Brothers Harriman.
The dollar fell 1 per cent to $1.5577 against the euro and dropped 0.6 per cent to Y100.11 against the yen.”
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