The Buck.."Nobody wants me." The dollar continued it's slide against the Euro today, closing at yet another all time low versus the nouvel Europèen currency. Gold continues to climb, hitting, and closing at a 15 year high in trading today.
There was a spate of economic news to digest today. Here is all you need to know. :)
One euro traded as rich as $1.2562, the most ever in its near five-year life. Europe's single currency has risen some 20 percent against the dollar this year, bearing the brunt of a significant dollar correction against the major world currencies.
The euro was recently up 0.5 percent vs. its U.S. counterpart at $1.2551.
The dollar index stood at a seven-year-low 87.20 on Tuesday.
More of the same
The dollar's woes will continue in 2004, David Gilmore, analyst with Foreign Exchange Analytics, wrote in note to clients this week.
"The currency market is prone to overshooting and if fair value for the euro-dollar is $1.15-$1.20, and the typical overshoot is 25 to 30 percent, then $1.44-$1.56 [per euro] is quite possible," he said.
The dollar fell to a fresh seven-year low 1.2408 francs vs. its Swiss counterpart. One dollar was recently fetching 1.2421 francs, a loss of 0.5 percent from New York trading on Monday.
The British pound hit new 11-year highs at $1.7815. Sterling was valued at $1.7781, up 0.3 percent from Monday, in recent trading.
The dollar remained within striking distance of a new three-year yen low, although ongoing suspicions that Japanese officials will intervene to curb the dollar's drop helped the greenback stabilize. The dollar was recently up 0.1 percent at 107.05 yen after trading as low as 106.89 yen.
The latest data from Japan shows total 2003 spending by the government in foreign exchange markets at about 20.1 trillion yen or about $180 billion - a record that outstrips the 7.6 trillion yen spent in 1999 to keep the yen from appreciating.
HSBC currency analyst Marc Chandler said the 106.80 dollar-yen level appears to be an area of sensitivity likely to produce more Japanese intervention.
Japanese markets are on holiday through Jan. 5, but that's not likely to keep intervention off the table, he said.
The dollar has fallen almost without pause against the world's major currencies, in part because officials on several continents have said the greenback's drop to date is not particularly alarming.
The dollar fell more than 1 percent against its Canadian counterpart, with one U.S. dollar bringing C$1.2928.
The dollar got little relief Tuesday from reports that the U.S. currency will be of chief topic when the leaders of the world's seven richest nations - the Group of Seven - meet in February.
An unnamed G-7 source, commenting about the Florida meetings, told Reuters that the dollar's levels were now entering an area of concern for European officials.
The rising euro could hurt eurozone exports just as the region's economic recovery takes hold.
According to the report, the official said a euro worth $1.30 represented the "pain level" not likely to be tolerated by the European leadership.
Data fall short
Meanwhile, the latest round of economic statistics offered little in the way of dollar support.
U.S. rates remain considerably lower than those set in the U.K. and Australia and marginally below eurozone rates, cutting the attractiveness of U.S. assets to overseas investors.
The Federal Reserve has said that excess economic slack and low inflation allow it some wiggle room with decades-low borrowing rates.
The U.S. Conference Board's monthly index fell to 91.3, down from an upwardly revised 92.5 in November, and below expectations of 92.3.
The group reported that the Present Situation Index declined to 73.9 from 81.0.
The Expectations Index increased to 102.9 from 100.1 or the highest level since 2002. As a result, U.S. bond prices remained under pressure. See Bond Report.
Consumers' assessment of the current job market deteriorated in December. Read more.
Separately, existing U.S. home sales fell 4.6 percent in November to 6.06 million units on a seasonally adjusted annual basis, the National Association of Realtors said Tuesday.
This marked the second-straight monthly decline after sales hit a monthly record of 6.68 million units in September. The November sales rate is at its lowest level since June. Get the full story.
Also reported Tuesday, the Chicago Purchasing Managers Index fell to 59.2 in December from 64.1 in November, which was the highest reading of the index since Oct. 1994.
Most economists said the one-month setback wasn't enough to cause worry about the sustainability of the factory-sector recovery.
But economists did pare back their forecasts for the closely watched national factory gauge from the Institute for Supply Management, due on Friday.
Shorter market report: Record levels of consumer and national debt are taking a big bite out of the purchasing power of the dollar -- without intervention, no relief in sight.
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