News Column

Portugal Woes Help Dollar Gain On European Rivals

July 10, 2014

WASHINGTON (Alliance News) - The dollar strengthened against its European rivals on Thursday amid concerns about trouble for some of Portugal's top banks.

Portuguese conglomerate EspÍrito Santo International this week delayed payments to some of the holders of its short-term debt securities.

The news renewed worries about the health of the European banking system and the region's sluggish economy.

The dollar rose to USD1.36 versus the euro, helped also by disappointing news from Italy and France, both of which reported notable drop in industrial output in May.

Meanwhile, the Bank of England has kept its interest rate at a historic low the size of quantitative easing at GBP 375 billion as expected by economists.

The dollar improved to USD1.7120 versus the sterling, up slightly from a recent 5-year low near USD1.72.

Japan's safe haven yen found buyers today, dropping the dollar a bit to Y101.50.

In economic news from the US, the Labor Department released a report on Thursday showing an unexpected drop in first-time claims for unemployment benefits in the week ended July 5th.

The report said initial jobless claims fell to 304,000, a decrease of 11,000 from the previous week's unrevised level of 315,000.

Yesterday, the Federal Reserve said it plans to completely unwind its asset purchase plan in October as long the US economy continues to pick up.

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Source: Alliance News

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