LONDON, 23 September 2005 — The dollar rose sharply against the euro yesterday, tracking falls in the gold price, on reports that Hurricane Rita may not be as devastating as previously thought.
The euro slipped to 1.2153 dollars in late European trading from 1.2217 late on Wednesday in New York. The dollar rose to 111.62 yen from 111.28 on Wednesday.
The euro fell to as low as 1.2134 dollars from levels comfortably above 1.22 dollars in the wake of the announcement, although trading remained very volatile and was set to remain so until the effect of the hurricane becomes clear.
The US Federal Reserve raised interest rates by a further quarter point on Tuesday and indicated that it would continue to hike rates at a “measured” pace despite the short-term negative impact of the Katrina hurricane.
The euro was changing hands at 1.2153 dollars against 1.2217 late on Wednesday in New York, 135.65 yen (135.97), 0.6785 pounds (0.6750) and 1.5543 Swiss francs (1.5519). The dollar stood at 111.62 yen (111.28) and 1.2789 Swiss francs (1.2707).
The pound traded at 1.7913 dollars (1.8090), 199.93 yen (201.32) and 2.2911 Swiss francs (2.2983).
On the London Bullion Market, the price of an ounce of gold stood at $466.25 from $469.10 late on Wednesday.
Meanwhile, European stock markets closed mixed yesterday, with the London FTSE 100 index gaining 0.30 percent at 5,385.7. In Frankfurt the DAX 30 dropped 0.54 percent to 4,849.01, while in Paris the CAC 40 fell 0.45 percent to 4,448.15.
In New York, US stocks held in a narrow range early yesterday. The Dow Jones Industrial Average edged up 2.23 points (0.02 percent) to 10,380.26 while the NASDAQ composite fell 5.32 points (0.25 percent) to 2,101.32 at 1530 GMT. The broad-market Standard and Poor’s 500 index was little changed with a drop of a fractional 0.36 point (0.03 percent) at 1,209.84.
Asian stocks closed mostly lower yesterday. In Tokyo, the Nikkei-225 index fell 37.21 points to 13,159.36. In Bombay, the Sensex index closed down 265.50 points to 8,221.64.