LONDON, 14 October 2005 — The dollar soared against the euro and the yen here yesterday, rising to a two-year high against the Japanese currency, on reports that the US trade deficit in August was not as large as expected. The single European currency in late-day trade was at 1.1938 dollars after 1.2023 late Wednesday in New York. The dollar, meanwhile, shot up to 114.94 yen from 114.35 on Wednesday. The greenback at one point reached 115 yen for the first time since Sept. 19, 2003.
The euro was changing hands at 1.1938 dollars against 1.2023 late on Wednesday in New York, 137.25 yen (137.51), 0.6828 pounds (0.6864) and 1.5505 Swiss francs (1.5479). The dollar stood at 114.94 yen (114.35) and 1.2980 Swiss francs (1.2871). The pound was being traded at 1.7490 dollars (1.7515), 201.03 yen (200.33) and 2.2702 Swiss francs (2.2550).
US stocks fell yesterday, weighed down by shares of energy companies that lost ground as crude prices dropped more than $1 a barrel due to lower demand. Exxon Mobil Corp. was down 2.4 percent at $57.50, Chevron Corp. fell 3.9 percent at $58.61 and ConocoPhillips lost 4.6 percent at $60.57. All trade on the New York Stock Exchange.
The Dow Jones industrial average was down 34.42 points, or 0.34 percent, at 10,182.49. The Standard & Poor’s 500 Index was down 6.78 points, or 0.58 percent, at 1,170.90. The technology-laced NASDAQ Composite Index was down 4.37 points, or 0.21 percent, at 2,033.10.
Asian stocks closed weaker yesterday amid ongoing fears surrounding inflation and another possible rise in US interest rates, but a late technical rebound took the markets of their lows, dealers said.
They said the turnaround was nonetheless cautious following another poor performance by Wall Street overnight, and investors were now sidelined ahead of the release of US inflation data, due out today. Higher oil prices and a weakening outlook for the IT industry also weighed on sentiment resulting in Mumbai, Seoul, Jakarta and Wellington suffering the biggest falls of the day.
Sydney, Manila, Bangkok and Kuala Lumpur were not far behind. Profit takers pulled Karachi down after steep gains were made on the prospect of a massive reconstruction effort following last weekend’s earthquake. But falls in Tokyo were limited by position squaring while Hong Kong bucked the trend with a modest gain, although the prospect of higher interest rates again served to cap the market.
World oil prices slipped yesterday after official US energy data revealed that crude inventories rose for the first time in seven weeks amid a fall in demand for refined products, analysts said. New York’s main contract, light sweet crude for delivery in November, fell 57 cents to $63.55 per barrel in pit trading.
In London, the price of Brent North Sea crude for November delivery lost 59 cents to $59.98 per barrel in electronic deals. US crude stockpiles rose by one million barrels to 306.4 million barrels in the week ending Oct. 7, according the Department of Energy (DoE), whose data was delayed by 24 hours owing to a public holiday in the United States on Monday.
It was the first increase since the week ending Aug. 19, while analysts’ consensus forecast had been for a rise of 1.7 million barrels as seven US refineries remaining out of action owing to hurricanes Katrina and Rita. Elsewhere the latest stocks data showed that gasoline, or petrol, inventories dropped by 2.7 million barrels last week compared with analysts’ predictions of a 1.1 million-barrel drop.
