News Column

Dollar Extends 3-month Peak Versus Euro

May 28, 2014

WASHINGTON (Alliance News) - The dollar was mixed on Wednesday, gaining on European rivals while coming under renewed pressure against Japan's yen.

With little economic news to drive trading, safe haven currencies like the dollar and yen were boosted by concerns that Ukraine's crisis may lead to a wider conflict.

Evidence of risk aversion was also seen in the bond market, where benchmark US Treasury yields fell to lows not seen since last summer.

The greenback surged a fresh 3-month peak versus the euro, extending this week's strong gains amid expectations the European Central Bank will introduce stimulus measures early in June.

A downbeat report on German unemployment likely cemented the ECB's plans.

German unemployment increased for the first time in six months in May, but the labor office said it is largely due to weather related factors. The number of people out of work increased by around 24,000 to 2.91 million in May, the Federal Labor Agency reported.

This was the first increase in six months and confounded expectations for a decline of 15,000.

The buck rose to USD1.3575 versus the euro, up another half a cent from yesterday.

Early gains took the dollar to USD1.67 versus the sterling.

British retail sales increased for the sixth straight month in May, but at a slower pace than in April.

Meanwhile, the dollar drifted slightly lower versus the yen. The pair slipped to Y101.75, not far from a recent 4-month low for the dollar.

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Source: Alliance News

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