LONDON, 27 September 2005 — The dollar hit a two-month high against the euro yesterday on relief that Hurricane Rita was much less destructive than many had feared, analysts said.
The euro firmed to $1.2052 in European trading from $1.2041 late on Friday in New York. The dollar slipped to 112.27 yen from 112.48 on Friday.
Relief that Hurricane Rita had failed to be a major catastrophe on the same scale as Katrina, propelled the dollar to two-month highs against the euro overnight but it failed to make significant further gains in London trading.
4CAST currency analyst Paul Bednarczyk said the single European currency has strong support at the $1.20 level, preventing it from moving below a low of 1.2011 seen at one point in the day. “The market is waiting for a catalyst and activity is very, very low,” he said.
The euro was changing hands at $1.2052 against 1.2041 late on Friday in New York, 135.34 yen (135.44), 0.6786 pounds (0.6781) and 1.5571 Swiss francs (1.5557). The dollar was trading for 112.27 yen (112.48), and stood at 1.2911 Swiss francs (1.2920).
On the London Bullion Market, the price of an ounce of gold stood at $461.50 from $462.65 late on Friday.
Meanwhile, European stock markets closed higher yesterday amid widespread relief that Hurricane Rita had not caused catastrophic damage to US Gulf Coast oil production facilities as had been feared before the weekend.
In London, the FTSE 100 index gained 0.73 percent at 5,453.1 points, the Frankfurt DAX 30 surged 2.37 percent to 4,998.16 points and in Paris the CAC 40 shot up 2.0 percent to 4,566.92 points, its highest level since April 2002. The DJ Euro Stoxx 50 index of leading euro zone shares jumped 2.08 percent to 3,400.93 points.
In New York, US stocks were higher yesterday after President George W. Bush said a significant amount of oil refining capacity shut by hurricanes Katrina and Rita will return soon, boosting investor sentiment about the impact of energy prices on consumers.
The Dow Jones Industrial Average was up 65.21 points, or 0.63 percent, at 10,484.80. The Standard & Poor’s 500 Index was up 5.02 points, or 0.41 percent, at 1,220.31. The technology-laced NASDAQ Composite Index was up 10.63 points, or 0.50 percent, at 2,127.47.
Asian stock markets closed sharply higher yesterday. In Tokyo, the Nikkei-225 index rose 233.27 points to 13,392.63, another four-year closing high, on turnover of 2.99 billion shares.
In Seoul, the KOSPI index closed up 30.53 points at 1,206.41. In Hong Kong, the Hang Seng Index closed up 130.34 points at 15,274.31. In Sydney, the S and P ASX 200 index closed up 56.5 points at 4,618.9, overtaking the previous record close of 4,580.9 set last Tuesday.
In Singapore, the Straits Times Index advanced 24.54 points to 2,317.58. In Kuala Lumpur, the composite index was up 3.24 points at 925.13. In Manila, the composite index fell 4.77 points to 1,954.74. The Bombay Stock Exchange’s 30-share Sensex index rose 256.32 points to close at 8,478.91, the biggest one-day gain since May 18, 2004.
The Indian stock market has risen more than 27 percent this year as foreign funds have invested more than $8 billion in local equities.
